Tisand Pty Ltd v The Owners of the Ship MV Cape Moreton (Ex Freya) - [2005] FCAFC 68

FEDERAL COURT OF AUSTRALIA
Tisand (Pty) Ltd v The Owners of the Ship MV “Cape Moreton” (ex “Freya”) [2005] FCAFC 68
ADMIRALTY – ARREST - meaning of the phrase ‘the owner’ in Part III of the Admiralty Act 1998 (Cth) – sale of vessel – completion of sale before the commencement of proceeding but after cause of action arose – vendor being the ‘relevant person’ remained entered as owner on the Liberian Register – whether the phrase ‘the owner’ necessarily includes the registered owner irrespective of the terms and state of completion of the underlying transaction – vendor held not to be ‘the owner’.
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Admiralty Court Act 1861 (Imp)
Colonial Courts of Admiralty Act 1890 (Imp)
Merchant Shipping Act 1862 (Imp)
Merchant Shipping Act 1894 (Imp)
Admiralty Act 1988 (Cth) ss 3, 4, 5, 6, 7, 8, 14, 15, 17, 18, 19
Constitution s 76(iii)
Shipping Registration Act 1981 (Cth)
Administration of Justice Act 1956 (UK) s 3(4)
Supreme Court Act 1981 (UK) s 21(4)
Convention on Conditions for Registration of Ships 1986
Convention on Limitation of Liability for Maritime Claims 1976
Geneva Convention on the Law of the High Seas 1958
International Convention for the Safety of Life at Sea 1974
International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships 1952
International Convention on Civil Liability for Oil Protection Damage 1969
International Convention on Load Lines 1966
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United Nations Convention on the Law of the Sea 1982
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TISAND (PTY) LTD AND ORS v THE OWNERS OF THE SHIP MV “CAPE MORETON” (EX “FREYA”)
NSD 898 of 2004
RYAN & ALLSOP JJ
29 APRIL 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

IN ADMIRALTY
NSD 898 of 2004

BETWEEN:

TISAND (PTY) LTD
FIRST PLAINTIFF

RICHARDS BAY IRON AND TITANIUM (PTY) LTD
SECOND PLAINTIFF

CHINA NATIONAL COMPLETE PLANT & EXPORT GUANGZHOU LTD
THIRD PLAINTIFF

AND:

THE OWNERS OF THE SHIP MV "CAPE MORETON" (EX "FREYA")
DEFENDANT

JUDGES:

RYAN & ALLSOP JJ

DATE OF ORDER:

29 APRIL 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
The notice of motion filed 10 June 2004 be stood over to a date to be fixed for the making of final orders.
Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

IN ADMIRALTY
NSD 898 of 2004

BETWEEN:

TISAND (PTY) LTD
FIRST PLAINTIFF

RICHARDS BAY IRON AND TITANIUM (PTY) LTD
SECOND PLAINTIFF

CHINA NATIONAL COMPLETE PLANT & EXPORT GUANGZHOU LTD
THIRD PLAINTIFF

AND:

THE OWNERS OF THE SHIP MV "CAPE MORETON" (EX "FREYA")
DEFENDANT

JUDGES:

RYAN & ALLSOP JJ

DATE:

29 APRIL 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT
THE COURT:
Introduction

On 8 June 2004, the motor vessel ‘Cape Moreton’ (the “ship”) was arrested by an Admiralty Marshal of the Court on the application of the plaintiffs in support of a claim by them for damage to a cargo of zircon sand said to have occurred on a voyage from Richards Bay in South Africa to China. A company called Freya Navigation Shipholding Limited (“Freya”) was said to be legally responsible, as carrier, for the damage.
Before the Court is a notice of motion dated 10 June 2004 brought by Alico Marine Limited (“Alico”), which has entered an appearance as owner of the ship. In the notice of motion, Alico seeks an order that the writ in rem under which the ship was arrested be set aside. Other orders were sought in the notice of motion, including the release of the ship. On 11 June 2004, orders were made for the release of the ship from arrest: [2004] FCA 752. Those orders were made by reason of the adequacy of security put up on behalf of Alico in the form of a P & I club letter, in a conditional form. The club’s provision of security was made conditional on the resolution of the ‘jurisdictional’ point, which is the subject of the orders sought in the notice of motion seeking the setting aside of the writ, and the subject of these reasons. Put shortly, the club acknowledged that it would provide security if it were held that the arrest was authorised under the Admiralty Act 1988 (Cth) (the “Act”). On the other hand, if there were no such authority, the letter did not respond.
The point is short, but important. The parties were agreed upon the primary facts. The substantial point of debate was the meaning of the phrase ‘the owner’ in s 17(b) (and so Part III) of the Act. On 16 September 2004, the Chief Justice made a direction under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) (the “FCA Act”) that the original jurisdiction of the Court, in part of the matter constituted by the notice of motion, was to be exercised by a Full Court. The only outstanding parts of that notice of motion were paragraphs 4, 5 and 6 which were in the following terms:
4.that the Writ in Rem be set aside for want of jurisdiction alternatively that the proceedings herein be dismissed for want of jurisdiction
5.that the Plaintiff pay the applicant’s costs of this notice of motion and of the proceedings including all costs of arrest and of the release of the vessel from arrest; [and]
6.such further or other order as to the Court seems appropriate.
On 18 November 2004, together with Cooper J, we heard argument on these paragraphs of the notice of motion. After late January 2005, Cooper J was unable further to consider the matter due to ill health. His Honour died on 14 March 2005. The parties have given their consent to our dealing with the matter as the Full Court: see s14(3) of the FCA Act.
On 22 September 2004, by way of elucidation of the issues for argument before the Full Court, the Court noted the agreement of the parties as to the issues before the Court in the following terms:
1.[The Court] notes the agreement of the parties that the notice of motion filed in Court on 10 June 2004 to be the subject of the hearing by a Full Court on 18 November 2004 raises the following issues:
(a) Whether as a matter of law upon the proper construction of s 17 of the Admiralty Act 1988 (Cth) the word “owner” necessarily includes “registered owner” (in the sense identified in paragraph [23] of the judgment delivered in these proceedings on 10 September 2004 [2004] FCA 1191);
(b) Whether upon the agreed facts set out in attachment “A” hereto, the agreed bundle of documents identified in the index being attachment “B” hereto, and any inferences properly drawn therefrom, the plaintiffs have established the jurisdictional fact required by s 17(b) of the Admiralty Act 1988 (Cth) in relation to their claim in the present proceedings.
The judgment delivered on 10 September 2004 ([2004] FCA 1191) referred to in paragraph 1(a) of the above agreement noted by the Court on 22 September 2004, dealt with the question of security for costs. In that judgment, Allsop J said the following at [22] and [23]:
The issue propounded by the plaintiffs for the jurisdictional hearing was expressed in their submissions as follows:
The only question to be determined for the purpose of jurisdiction is whether as a matter of construction of s 17 of the Admiralty Act 1988 “owner” includes “registered owner”.
By this expression of the issue I take the plaintiffs to be saying that the question of construction is as to whether in s 17 of the Admiralty Act the word “owner” necessarily includes registered owner. By this I do not mean that the registration of a party as owner is a necessary incident of that party being the owner. Cases such as The Iron Shortland (1995) 59 FCR 535 and The Maria Luisa (2002) 130 FCR 1 and (2003) 130 FCR 12 make clear that in Australia a party may be the “owner” of a ship for the purposes of ss 17, 18 or 19 and not be on any Register, if it is the beneficial owner. What the plaintiffs say is that if a party is in fact registered as owner on an international ship register that, of itself, is sufficient for satisfaction of the criterion of “owner” in the above sections, irrespective of the beneficial ownership (in the property sense) of the ship.
To put the matter shortly, Alico said that, whilst Freya was the person liable on the cargo claim and was the owner at the time the cause of action arose, before the commencement of the proceedings the ship had been sold by Freya to Alico so that Freya was no longer ‘the owner’, even though it remained recorded in the relevant register of ships in Liberia as the owner. The ship, it was said, had been sold to a bona fide purchaser (Alico) for value. Thus, said Alico, it was the owner at the time of the commencement of proceedings, and since it was not the relevant person for the purposes of s 17(b) of the Act there was no statutory basis on which to commence the action in rem or to arrest the ship.
The Agreed Facts
The claim of the plaintiffs is in the order of USD 224,000 plus interest and costs for damage to a bulk consignment of zircon sand carried on the ship from Richards Bay in South Africa to Shanghai under a bill of lading dated 25 July 2003.
Annexure A to the orders of 22 September 2004 set out the agreed facts and was in the following terms:
(a)The plaintiffs commenced proceedings as an action in rem against the MV Cape Morton pursuant to section 10 of the Admiralty Act 1988 in the Federal Court of Australia in respect of a general maritime claim under section 4(3) (d), (e), (f) and (w) on 3 June 2004.
(b)As at the date when the cause of action underlying the general maritime claim arose, in accordance with the laws of Republic of Liberian Registry, Freya Navigation Shipholding Limited was the registered owner of the MV Cape Moreton and was the relevant person for the purposes of section 17 of the Admiralty Act 1988 (Cth) in relation to the plaintiffs’ claim and the said vessel was recorded as registered under the Liberian Flag with the year date of registration being 1998, port of registry Monrovia and certificate of registry number 70—04-NY and official number 10972;
(c)As at the date when these proceedings were commenced the same relevant person was registered with the Republic of Liberian Registry as the owner of the mv Cape Moreton and the vessel name numbers year and port of registry remained as above;
(d)As at the date of the commencement of these proceedings Alico Marine Ltd had obtained provisional registration with the Hong Kong Registry of the mv Cape Moreton on 25 May 2004.
(e)Under the bill of sale from Freya Navigation to Alico Marine Ltd dated 24 May 2004 the usual warranty was given of being free of all liens, debts and claims. The bill of sale was a standard form bill of sale which records “official number”, “Name of Ship”, “Number, year, and port of registry”.
(f)On 21 May 2004 the Deputy Commissioner of Maritime Affairs of the Republic of Liberia granted permission for transfer of Liberian Vessel subject to payment of outstanding charges and fees and discharge or release as of record of a First Preferred Mortgage and that a certificate of cancellation would issue upon surrender of the vessel’s current valid Certificate of Registry, Ship radio station licence and executed copies of the bill of sale.
(g)On 24 May 2004, a further permission for transfer of the ship was issued by the Deputy Commissioner of Maritime Affairs of the Republic of Liberia, subject to the same outstanding steps as above, other than discharge of the mortgage.
(h)These steps were not fulfilled by the purchaser (Alico Marine Ltd) prior to commencement of these proceedings
At the date the cause of action arose the nominated relevant person for the purposes of s 17 of the Act, Freya, was (and is accepted to have been) the owner of the ship for the purposes of s 17(a) of the Act.
The documentary evidence disclosed that the following events occurred before the commencement of the proceedings by filing of the writ on 3 June 2004.
On 13 April 2004, the board of directors of Freya, after a report from the chairman as to the proposed sale of the ship to Alico, resolved as follows:
1.That the Company sell and deliver its Liberian flag motor vessel “CAPE MORETON” to Alico Marine Ltd for US $7,225,000 (seven million two hundred twenty-five thousand United States dollars) pursuant to the terms of a Memorandum of Agreement dated 15^th April 2004, the terms of which are hereby confirmed, approved and ratified.
…
On the same day, 13 April 2004, the shareholders of Freya in their entirety (in person or by proxy) resolved as follows:
That the shareholders approve in all respects the resolution of the board of directors passed earlier this day approving the sale of the Company’s Liberian flagged vessel “CAPE MORETON” to Alico Marine Ltd for US$7,225,000 (seven million two hundred twenty-five thousand United States dollars) and granting of power of attorney in favour of Elliot Levin of Houston, Texas, United States of America, Floyd L. Cox of Potomac, Maryland United States of America, Michael Timpone of Fair Haven, New Jersey, United States of America and Charles Hugh Clabon Knight of Westville Natal South Africa, appointing them the Company’s attorneys each one with power to act individually, to effect such sale.

On 19 April 2004, the board of directors of Alico resolved to purchase the ship.
On 20 April 2004, Alico executed a power of attorney in favour of named parties to represent it in the purchase of the ship from Freya.
On 22 and 23 April 2004, respectively, Freya and Alico executed an agreement, dated 15 April 2004, for the sale of the ship. The agreement was in Norwegian Saleform 1993 with amendments and additional clauses. (Amendments by way of excision and additions, unless expressly referred to, are not noted in the extracts of the agreement quoted below.)
Lines 1 and 2 of the Saleform agreement made clear the contractual status of the agreement (as opposed to it being a document of transfer):
Freya Navigation Shipholding Ltd of 80 Broad Street, Monrovia Liberia hereinafter called the Sellers, have agreed to sell,…
[emphasis added]
Clause 3 of the agreement dealt with payment:
3. Payment
The said Purchase Price shall be paid in full free of bank charges to Nordes Bank, NY – 437 Madison Avenue, New York, NY 10022
on delivery of the Vessel, but not later than 3 banking days after the Vessel is in every respect physically ready for delivery in accordance with the terms and conditions of this Agreement and Notice of Readiness has been given in accordance with Clause 5.
in exchange of payment Sellers to release Bill of Sale and other documentation as required by Buyers for registration and legal (sic) valid transfer of the Vessel to the Buyers.
Clause 5 dealt with, amongst other things, delivery and included the following:
5.Notices, time and place of delivery – See Clause 17
….
(b)The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or anchorage in Sellers option in accordance with C/P dated Feb 18^th, 2004. Vessel is trading in AAL’s Australia/Indonesia/Singapore/Thailand/Malaysia service, but Charterers have option to trade outside that area.
…
Expected time of delivery: April 20^th – May 21^st 2004 in Sellers option.
…
Clause 8 dealt with the documentation and included the following:
8. Documentation – See Clause 19
The place of closing: To take place at Sellers nominated bank unless mutually agreed.
…
At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers.
At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all plans etc, which are on board the Vessel. This includes all available manuals relative to main engine/auxiliaries in addition to all other existing manuals/instruction books/plans, main engines, generators previous overhaul reports. Other certificates which are on board the Vessel shall also be handed over the Buyers unless the Sellers are required to retain same , in which case the Buyers to have the right to take copies. Other technical documentation which may be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take copies of same.
Sellers Master and Chief Engineer to demonstrate Vessel’s operation to their opposite numbers at the time of delivery.
The following standard provisions of cl 8 of the Saleform agreement were deleted:
In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with delivery documents, namely:
a.Legal Bill of Sale in a form recordable in (the country in which the Buyers are to register the Vessel), warranting that the Vessel is free from all encumbrances, mortgages and maritime liens or any other debts or claims whatsoever, duly notarially attested and legalised by the consul of such country or other competent authority.
b.Current Certificate of Ownership issued by the competent authorities of the flag state of the Vessel.
c.Confirmation of Class issued within 72 hours prior to delivery.
d.Current Certificate issued by the competent authorities stating that the Vessel is free from registered encumbrances.
e.Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and furnish a Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the Purchase Price has been paid and the Vessel has been delivered.
f.Any such additional documents as may reasonably be required by the competent authorities for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement.
Clause 9 dealt with encumbrances as follows:
The Sellers warrant that the Vessel, at the time of delivery, is free from, encumbrances, any/all mortgages and maritime liens or any other debts whatsoever. The Sellers hereby undertake to indemnify the buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery.
Clause 11 dealt with the condition of the ship on delivery and, within that subject matter, it dealt with the issue of the passing of risk, as follows:
11.Condition on delivery
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of the Agreement she shall be delivered and taken over as she was at the time of inspection, fair wear and tear excepted. Sellers to maintain vessel to their present standards till the time of delivery.
However, the Vessel shall be delivered with her present class fully maintained without recommendation”,
free of average damage affecting the Vessel’s class, and with her classification certificate and International/national trading certificates, as well as all other certificates the vessel had at the time of inspection, clean and valid and unextended without recommendation by Class or the relevant authorities at the time of delivery for a minimum of 3 months “Inspection” in Clause 11 shall mean the Buyers’ inspection according to Clause 4a or 4b, if applicable, or the Buyers’ inspections prior to the signing of this Agreement. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date.
[emphasis added]
Clause 16 dealt with proper law and arbitration and was in the following terms:
a)This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of this agreement shall be referred to arbitration in London (London Maritime Arbitrators Association) in
accordance with the Arbitration Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force, one arbitrator being appointed by each party. On the receipt by one party of the nomination in writing of the other party’s arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree they shall appoint an umpire whose decision shall be final.
Clause 17, referred to in cl 5, was in the following terms:
Failing delivery within the cancelling date, Buyers right to maintain or cancel and in event of cancellation deposit together with any accrued interest to be immediately released to the buyers in the event it is likely that the vessel will not be able to deliver within the agreed cancelling date when the Sellers are to inform the Buyers (in writing) to this effect (either by telex or fax). Whereupon the Buyers will be obliged to inform the Sellers whether they wish to extend the cancelling date or cancel the contract within 48 hours from receipt of such notification. In the event of an extension then same shall be mutually agreed between both Buyers/Sellers. In the event of cancellation then the deposit along with accrued interest shall be returned to the Buyers.
Clause 19 (referred to in cl 8) was in the following terms:
In exchange for payment of the vessel’s full purchase price along with any other payments called for in accordance with the MOA the Sellers shall furnish the Buyers with delivery documents which to be advised by the Buyers and to be incorporated in an addendum to the MOA. Buyers intend reflagging to Hong Kong flag.
On 28 April 2004, Alico entered into an agreement with a third party (“Fleet Management”) for the management of the ship. By late April 2004, that company had begun to act on behalf of Alico in connection with the management of the ship.
On 29 April 2004, Alico made application to have the ship put on the Hong Kong Register.
On 30 April 2004, Fleet Management appointed the Chief Engineer for the ship.
Also on 30 April 2004, the Hong Kong Shipping Registry granted approval-in-principle for registration of the ship on the Hong Kong Shipping Register.
On 1 May 2004, Fleet Management appointed the Master of the ship.
On 20 May 2004, an agreement was executed by Freya, Alico and the time charterer of the ship, which novated the time charter to replace Freya with Alico. The time charter, under the New York Produce Exchange Form (1946), had been entered into on 19 February 2004.
On 21 May 2004, the Bureau of Affairs of the Republic of Liberia gave conditional permission to transfer the ship to the Hong Kong Register. The permission required certain mortgages to be paid out as well as the payment of fees and charges, and was expressed as follows:
Subject to the payment of outstanding charges and fees, if any, and the discharge or release as of record of the following liens against the herein described vessel recorded in the Office of the Commissioner or a Deputy Commissioner of Maritime Affairs:
FIRST PREFERRED MORTGAGE dated July 2, 1998, granted by Freya Navigation Shipholding Ltd to Christiania Bank Kredikasse ASA, New York Branch in the total amount of U.S. $6,750,000 and interest and performance of the mortgage covenants; recorded on July 2, 1998 at 11.31 A.M., E.D.S.T. in Book PM 50 at Page 435.
Amendment NO. 1 to the above First Preferred Mortgage dated October 2, 2001; to amend the First Preferred Mortgage lien on the FREYA, dated July 21, 1998, to reflect a change in the final maturity and a reduction of the mortgage amount; recorded on October 2, 2001 at 4.45 P.M., E.D.S.T. in Book PM 53 at Page 718.
Permission is granted to the registered owner of the said vessel for sale to ALICO MARINE LTD of the MARSHALLS ISLANDS for TRANSFERRING into HONG KONG FLAG and REGISTRY.
A certificate of Cancellation of Registry will be issued upon surrender to the Commissioner or a deputy Commissioner of Maritime Affairs, or to a duly appointed agent of the Commissioner or a Deputy Commissioner of Maritime Affairs, of the vessel’s currently valid Certificate of Registry (Item 10) and Ship Radio Station License (Item 12), and submission of the following additional documents and proofs:
Three (3) EXECUTED COPIES OF THE BILL OF SALE
The permission granted herewith shall be null and void after the expiration of ninety days from the date hereto. Pursuant to the authority contained in Title 21 of the Liberian Code of Laws of 1956, as amended, it is hereby certified that permission has been granted for the transfer of the herein described vessel as set forth above.
On 24 May 2004, a duly authorised officer of Freya signed and sealed a bill of sale of the ship which was notarised and which contained the following:
We, (a) FREYA NAVIGATION SHIPHOLDING, LTD. (hereinafter called “the Transferors”) having our registered address as 80 Broad Street, Monrovia, Liberia in consideration of the sum of US$ Seven Million Two Hundred Twenty-Five Thousand (United States Dollars 7,225,000.00) plus other good and valuable consideration paid to us by (b) ALICO MARINE LTD., having its address as Trust Company Complex, Ajeltake Road, Aljetake Island, Majuro, Marshall Islands, MH 96960; (hereinafter called “the Transferees”), the receipt of which is hereby acknowledged, transfer 100% shares in the Ship above particularly described, and in her boats and appurtenances, to the said Transferees.
Further, we, the said Transferors for ourselves and our successors, covenant with the said Transferees and (c) its assigns, that we have power to transfer in manner aforesaid the premises hereinbefore expressed to be transferred, and that the same are free from encumbrances, (d) maritime liens, mortgages, taxes or any debts/claims.
In witness whereof we have caused this Bill of Sale to be duly executed this the 24^th day of May, 2004.
The parties were agreed (see fact (e) at [9] above) that the bill was in standard form, from which we take it, in the context of the use of Norwegian Saleform 1993, that the bill was in standard international usage. We infer from the agreed facts and documents that the bill of sale was delivered to Alico or an authorised representative of Alico.
On the 24^th day of an unidentified month, which we infer was May 2004, the Liberian Bureau of Maritime Affairs issued a second permission for transfer of Liberian vessel which was in the following terms:
Subject to the payment of outstanding charges and fees, if any, and the discharge or release as of record of the following liens against the herein described vessel recorded in the Office of the Commissioner or a Deputy Commissioner of Maritime Affairs:
Admission is granted to the registered owner of the said vessel for sale to ALICO MARINE LTD of the MARSHALLS ISLANDS for TRANSFERRING into HONG KONG FLAG and REGISTRY
A certificate of Cancellation of Registry will be issued upon surrender to the Commissioner or a Deputy Commissioner of Maritime Affairs, or to a duly appointed agent of the Commissioner or a Deputy Commissioner of Maritime Affairs, of the vessel’s currently valid Certificate of Registry (Item 10) and Ship Radio Station License (Item 12), and submission of the following additional documents and proofs:
Three (3) EXECUTED COPIES OF THE BILL OF SALE
The permission granted herewith shall be null and void after the expiration of ninety days from the date hereof. Pursuant to the authority contained in Title 21 of the Liberian Code of Laws of 1956, as amended, it is hereby certified that permission has been granted for the transfer of the herein described vessel as set forth above.
Payment in full for the ship occurred on 25 May 2004, the payment being financed by a borrowing by Alico or by a party on its behalf from a Greek bank. The payment was accompanied by commercial invoices and relevant inter-bank documents.
On 25 May 2004, a Hong Kong ship mortgage pursuant to s 44 of the Merchant Shipping (Registration) Ordinance was executed by Alico in favour of the Greek bank.
On 25 May 2004, Fleet Management appointed the Chief Officer for the ship.
A protocol of delivery and acceptance of the ship was signed on behalf of Alico and Freya in the following terms:
KNOWN [sic] ALL MEN BY THESE PRESENTS:
That Freya Navigation Shipholding Ltd., Monrovia Liberia (the Sellers) have sold and do grant and deliver on the 25^th day of 2004 (sic), at 16.30 Hours GMT, at Brisbane unto ALICO Marine Ltd of Marshall Islands (the Buyers), all rights to, title to and interest in and to one (1) Motor Vessel “CAPE MORETON” – IMO 8012695 – GRT 16,558 NRT 8,975 (the Vessel) together with all parts and equipment as are on board, free and clear of all encumbrances, mortgages, maritime liens, claims, taxes and any other debts whatsoever, in accordance with the Memorandum of Agreement dated 15^th of April 2004 between the Sellers and the Buyers.
That Buyers do hereby accept delivery of and title to the aforesaid Vessel on the date and at the time and place as stated above and do hereby certify that same has been delivered and taken over in accordance with the provision of said Memorandum of Agreement.
The inference can be drawn that the word “May” on the second line of the protocol of delivery was accidentally omitted from the bill of sale. No argument to the contrary was put. No argument was put that we should not read the second line as stating, relevantly, “25^th day of May 2004”. Such a course is justified by Fitzgerald v Masters (1956) 95 CLR 420, 426-27; Wright v Australian and New Zealand Banking Group Ltd [2001] FCA 386 at [8]-[9]; Bowler v Hilda Pty Ltd (2001) 112 FCR 59 at [11], [13] and [14]; Tirango Nominees Pty Ltd v Vale Foods Ltd [2000] FCA 1524 at [22]; Lisciandro v Official Trustee in Bankruptcy (1996) 69 FCR 180, 189-90; and Maddestra v Penfolds Wines Pty Ltd (1993) 44 FCR 303, 306.
In May 2004, the Attorney-in-fact for Freya provided the following written undertaking to Alico:
With reference to the Memorandum of Agreement dated 15 April 2004 for the sale of motor vessel “CAPE MORETON” we hereby undertake to provide you with a Deletion Certificate issued by the Liberian Registry within 3 (three) weeks after the purchase price has been paid and the Vessel has been delivered.
On 25 May 2004, provisional entry of the ship took place on the Hong Kong Register evidenced by a transcript of the Register of the Marine Department Hong Kong confirming provisional registration of ‘Cape Moreton’ and Alico as her owner. The expiry date of the provisional registry was 25 June 2004.
As at 3 June 2004, the Certificate of Ownership and Encumbrance on the Register of Ships kept by the Bureau of Maritime Affairs of the Republic of Liberia named Freya as the owner.
On 3 June 2004, in rem proceedings were commenced in this Court.
On 8 June 2004, the Deputy Commissioner of Maritime Affairs of Liberia signed a certificate of cancellation of Registry of Liberian Vessel ‘Cape Moreton’.
On 8 June 2004, the ship was arrested.
Neither party sought to adduce evidence of any foreign law – whether of Liberia (the flag state until at least 8 June 2004 and the domicile of the seller, Freya), Hong Kong, the Marshall Islands (the domicile of the buyer) or England (as the proper law of the agreement for sale). (It should be noted, however, that argument took place using texts and cases which, to a degree, gave an insight into British and other foreign legislation, both historically and contemporaneously.)
In summary, before the commencement of proceedings, a transaction of sale and purchase between, we infer, unrelated parties took place, whereby the relevant person (Freya) agreed to sell the ship to Alico, executed and delivered a standard form bill of sale, delivered full possession of the ship and received full payment in respect of the sale. The individuals concerned appear to have acted, and the bill of sale to have been executed, with full authority of Freya and Alico. No submission to the contrary was put. The ship continued, nevertheless, to fly the Liberian flag and the Liberian Register continued to identify the seller, Freya (the relevant person) as owner until after the in rem proceedings were commenced.
The Statutory Provisions
Part III of the Act is entitled “Rights to Proceed in Admiralty”. Section 14 limits the right to commence an action in rem against a ship or other property to circumstances as provided by the Act.
Sections 15 to 19 of the Act are in the following terms:
s 15 Right to proceed in rem on maritime liens etc.
(1) A proceeding on a maritime lien or other charge in respect of a ship or other property subject to the lien or charge may be commenced as an action in rem against the ship or property.
(2) A reference in subsection (1) to a maritime lien includes a reference to a lien for:
(a) salvage;
(b) damage done by a ship;
(c) wages of the master, or of a member of the crew, of a ship; or
(d) master's disbursements.
s 16Right to proceed in rem on proprietary maritime claims
A proceeding on a proprietary maritime claim concerning a ship or other property may be commenced as an action in rem against the ship or property.
s 17Right to proceed in rem on owner's liabilities
Where, in relation to a general maritime claim concerning a ship or other property, a relevant person:
(a) was, when the cause of action arose, the owner or charterer of, or in possession or control 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 as an action in rem against the ship or property.
s 18Right to proceed in rem on demise charterer's liabilities
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.
s 19Right to proceed in rem against surrogate ship
A proceeding on a general maritime claim concerning a ship may be commenced as an action in rem against some other ship if:
(a) a relevant person in relation to the claim was, when the cause of action arose, the owner or charterer of, or in possession or control of, the first-mentioned ship; and
(b) that person is, when the proceeding is commenced, the owner of the second-mentioned ship.

Section 6 of the Act is in the following terms:
s 6 Certain rights not created or affected The provisions of this Act (other than section 34) do not have effect to create:
(a) a new maritime lien or other charge; or
(b) a cause of action that would not have existed if this Act had not been passed.
Section 41 of the Act provides for the Governor-General making Rules, not inconsistent with the Act, in relation to, amongst other things, the arrest of ships and other property. Rule 39 provides for the application for an arrest warrant in respect of the ship or other property in a proceeding commenced as an action in rem. Thus, the entitlement to commence a proceeding in rem under the Act provides the entitlement to apply for an arrest warrant. If the provisions of the Act are not satisfied at the commencement of proceedings in rem, there is no basis for the arrest and the writ in rem should be set aside, as would be the arrest, if it were still on foot.
Section 15 of the Act provides for actions in rem for proceedings on a maritime lien or charge. Section 16 of the Act provides for actions in rem for proceedings on a proprietary maritime claim concerning the ship, which term is defined in s 4(2) of the Act. The relationship required in these provisions is between a claim of a certain character and the ship or other property. The relationship does not depend in terms upon the identification of any particular person. Nor does it depend on the identification of ownership, or other rights, in that person in connection with the ship.
Section 17 of the Act provides for a proceeding on a general maritime claim concerning the ship to be commenced as an action in rem. The phrase ‘general maritime claim’ is defined in s 4(3) of the Act. The relationship required is two-fold: (a) the claim must concern the ship (as to which see also The ‘Eschersheim’ [1976] 1 WLR 430 and The ‘Beldis’ [1936] P 51); and (b) the claim must be brought against the relevant person (as the person who would be liable on the general maritime claim if it were commenced as an action in personam and if it were successful. (See the definition in s 3(1) of the Act, Schwarz & Co (Grain) Ltd v Owners of the ‘St Elefterio’ (ex ‘Arion’) [1957] P 179 and Owners of ‘Iran Amanat’ v KMP Coastal Oil Pte Ltd (1999) 196 CLR 130.) The relevant person must, at the two points of time referred to in paras 17(a) and (b), have a connection with the ship there referred to. The connection at the second of these two points of time is the requirement that the relevant person be ‘the owner’.
Section 18 of the Act deals with the writ in rem in respect of a demise charterer’s liabilities. It provides for actions in rem for proceedings on a proprietary or general maritime claim in which, under s 18(b), at the time when the proceedings are commenced, the relevant person is the demise charterer.
Section 19 of the Act provides for actions in rem in proceedings on a general maritime claim concerning a first ship to be brought against a surrogate ship if the owner of the surrogate ship at the time when the proceeding is commenced was a relevant person in relation to the claim when the cause of action arose, as the owner or charterer of, or in possession or control of the first ship.
The issue for decision here is the content of the meaning of the phrase ‘the owner’ where it appears in s 17(b) of the Act (and so also ss 17(a), 18 and 19) and of the application of the provision, so interpreted, to the facts of this case.
The Approach to Interpretation
Before considering the arguments of the parties, it is appropriate to set out the proper approach to the interpretation of the Act. The interpretation of the meaning of the phrase ‘the owner’ in s 17, and the Act as a whole, is to be undertaken by reference to the modern Australian common law principles identified by the High Court in CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 187 CLR 384, 408; Newcastle City Council v GIO General Ltd (1997) 191 CLR 85, 112; and Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 205 ALR 1, (2004) 78 ALJR 585 at [11]. This requires, where appropriate (as it is here), that the words of the statute be read and understood in their legal and historical context. In Network Ten the matter was summarised as follows by McHugh ACJ, Gummow J and Hayne J at [11]:
In Newcastle City Council v GIO General Ltd, … McHugh J observed:
[A] court is permitted to have regard to the words used by the legislature in their legal and historical context and, in appropriate cases, to give them a meaning that will give effect to any purpose of the legislation that can be deduced from that context.
His Honour went on to refer to what had been said in the joint judgment in CIC Insurance Ltd v Bankstown Football Club Ltd. … There, Brennan CJ, Dawson, Toohey and Gummow JJ said: …
It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. … Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses “context” in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy.…Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd,… if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent…
[emphasis added]^.
Thus, the identification of ambiguity, whether linguistic or other, is not a precondition to examining the context of a statute and its component provisions. Here, the phrase ‘the owner’ in ss 17, 18 and 19 might appear to be tolerably plain. Indeed, Alico submitted that the natural and ordinary meaning of the word ‘owner’ was informed by notions of property law only, and that it involved questions of title, possession, control and enjoyment, to which registration bore only an adjectival or evidential relationship.
What might be said to be a lack of ambiguity in an ordinary English word or phrase may prevent resort to extrinsic material by authority of s 15AB of the Acts Interpretation Act 1901 (Cth). In this respect, see Newcastle City Council v GIO at 112-3. It does not, however, preclude an examination of the context of the relevant legislation, in the widest sense, in order to understand the meaning of the relevant provision from the correct perspective.
The context of the Act, the provisions dealing with arrest and the notion of owner and ownership used in the Act and in those provisions have an international, as well as a municipal, Admiralty and maritime context of some pedigree.
The Act was the response of the Commonwealth Parliament to the evident need for the clarification and reorganisation of Australian Admiralty and maritime jurisdiction provided for in the Constitution, in particular in s 76(iii). The Act followed the Australian Law Reform Commission Report No 33 on Civil Admiralty Jurisdiction (the “ALRC Report”). The context from which the Act is derived is not, however, to be found solely in the ALRC Report. The ALRC Report examined the history of Admiralty and maritime law and jurisdiction and made recommendations for the reformulation of Australian law. The formulation of the provisions dealing with in rem actions can be seen against a history which included the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships, done at Brussels on 10 May 1952 (the “1952 Arrest Convention”), the differences between European and English approaches to arrest and seizure of a debtor’s assets, the law of maritime liens, and the long standing laws and practices of maritime nations in relation to registration, flagging and sale of sea-going ships.
To the extent that it is necessary to have recourse to the 1952 Arrest Convention and to understand how words were used in that international instrument, the principles governing that task are set in a number of cases of high authority and were summarised in El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA [2004] FCAFC 202; (2004) 209 ALR 448; [2004] 2 Lloyd’s Rep 537 at [139] to [148].
The task of interpretation of the Act is to be guided also by what the High Court said in Owners of ‘Shin Kobe Maru’ v Empire Shipping Co Inc (1994) 181 CLR 404 at 416-20 about the importance of the ALRC Report in discovering the purpose and policy of the Act. As Murray J put the matter in Yulianto v The Ship ‘Glory Cape’ (1995) 134 ALR 92 at 95-96:
[A]s was pointed out by the High Court in “Shin Kobe Maru”, the Admiralty Act 1988 (Cth) placed into statutory form the recommendations of the Law Reform Commission in its report Civil Admiralty Jurisdiction (1986). It was the view of the Commission that the obscurities and uncertainties about the scope of the jurisdiction should be reformed and that Australian interests were best served by a widening of the Admiralty jurisdiction, at the same time endeavouring to clarify and simplify the law (at CLR 416-17). These being remedial provisions, they should receive a facilitative interpretation. The words of s 4 should be given “their natural and ordinary meaning” (at CLR 418). The provision should not be interpreted in a restrictive way or read down by reference to the earlier expression of admiralty practice and principles. The evident purpose of the Act must be given effect to and the court should proceed by reference to the proposition that “a statutory definition should be approached on the basis that parliament said what it meant and meant what it said” (at CLR 420). The principles thus expressed are, of course, of an ordinary kind in relation to the task of statutory interpretation.
The Arguments of the Parties
It should be noted that the submissions were put forward on the basis that the relevant issue for decision was the meaning of the word ‘owner’ in Part III of the Act. Though in this case it makes no difference, we think it preferable to pose the question as the meaning of the phrase ‘the owner’.
The plaintiffs’ submissions
The plaintiffs submitted that the word ‘owner’ should be given a broad construction not restricted by notions of municipal property law, but extending necessarily to the well-known international creature – the registered owner. There were several strands of argument said to support the conclusion contended for by the plaintiffs. First, the registration of ownership on public national ship registers had been an important feature of international law and commerce since the 17^th century. Registration and registered ownership had, and have, important functions in maritime law, not the least being the identification of nationality and the flag.
Secondly, the text of the Act was said to lead to the conclusion that the word ‘owner’ necessarily included the registered owner. Particular reference was made to ss 3, 4(2), 4(3)(b), 5(1)(a), 8, 17, 18 and 19 of the Act and, in particular, to the relationship between s 4(3)(b) and Part II of the Protection of the Sea (Civil Liability) Act 1981 (Cth) and the International Convention on Civil Liability for Oil Protection Damage (done at Brussels on 29 November 1969) which underpins that legislation.
Thirdly, a jurisdictional provision of the kind found in s 17 should be given a broad interpretation for the creation of an adequate jurisdictional nexus. Reference was made to The ‘Shin Kobe Maru’ in this regard. This is especially so in construing legislation which can be characterised as remedial, an expansive reading being in Australia’s interests.
Fourthly, the Shipping Registration Act 1981 (Cth) (the “SR Act”) was said to be a cognate piece of legislation, in particular because of the amendment of that legislation by the Act.
Fifthly, support was sought to be drawn from what Sheppard J said in Malaysia Shipyard and Engineering Sdn Bhd v The ‘Iron Shortland’ (1995) 59 FCR 535 at 539, 544, 546 and 547 in the context of a discussion of The ‘Evpo Agnic’ [1988] 1 WLR 1090, that there was nothing to indicate (unlike in the terms of s 21 of the Supreme Court Act 1981 (UK), dealt with in The ‘Evpo Agnic’) that the word ‘owner’ should be restricted only to registered owner. Thus, the readiness of Sheppard J in that case to regard the word ‘owner’ as including beneficial owner reflected an implicit view of his Honour, it was submitted, that the notion of registered owner was always included. In this context, what was said by Lord Donaldson of Lymington MR in The ‘Evpo Agnic’ at 1095 and 1096 in respect of the use of the word ‘owner’ as it appears in s 21(4) of the Supreme Court Act 1981 (UK) can be called in aid of the plaintiffs’ argument:
The first issue to be confronted and decided is therefore who is "the relevant person" for the purposes of section 21(4)(b). Such a person has to meet two criteria. First, he must be the (or possibly a) person who would be liable on the claim in personam. Second, he must, at the time when the cause of action arose, have been the owner or charterer of, or in possession or control of, the ship. "Charterer" in this context, which includes the Convention, must I think mean demise charterer and the words "or in possession or in control of, the ship" must refer to a person who is in the position of a demise charterer, albeit not under a demise charter - a salvor might be such. However, for present purposes, what is in issue is what is meant by "owner." Does it refer to the registered owner, who necessarily is the legal owner, or to someone who has only an equitable property in the ship?
In answering this question I bear in mind three important considerations. First, it is a basic rule of construction that where a statute employs different terminology in different provisions, prima facie a different meaning is intended and this is particularly the case if the differing terminology occurs within a single subsection. “Owner” in paragraph (b) of section 21(4) thus falls to be contrasted with “beneficial owner” in sub-paragraphs (i) and (ii). Second, all maritime nations maintain registers of shipping which record the names of the owners. These registers are of fundamental importance as establishing the flag of the vessel, thereby making it for some purposes part of the floating territory of that country and subjecting it to the laws of that country. I would therefore regard the concept of a registered owner as being a nominal owner as a contradiction. Third, the Convention clearly looks to ownership and registered ownership as one and the same, although as Robert Goff J pointed out in I Congreso del Partido [1978] QB 500, 541, the “trust” concept involving a dichotomy between legal and equitable ownership may be unknown to some, and perhaps most, other jurisdictions. My conclusion is that, in relation to a registered ship, “owner” in section 21(4)(b) means “registered owner.”
…
…in real commercial life … registered owners, even when one-ship companies, are not bare legal owners. They are both legal and beneficial owners of all the shares in the ship and any division between legal and equitable interests occurs in relation to the registered owner itself, which is almost always a juridical person. The legal property in its shares may well be held by A and the equitable property by B, but this does not affect the ownership of the ship or of the shares in that ship. They are the legal and equitable property of the company.
[emphasis added]
Sixthly, similar support was sought to be drawn from both the reasons of the majority and of Moore J in Kent v SS ‘Maria Luisa’ (No. 2) (2003) 130 FCR 12 at [19] and [42] to the effect that the extension of the meaning of ‘owner’ to ’beneficial owner’ was inclusive, and not exclusive, of the notion of registered owner.
Seventhly, the plaintiffs pointed to other maritime statutes (said to be in pari materia) that used the notion of ‘ownership’ and ‘owner’ sufficiently widely to include registered owner. One example given was Part VIII of the Merchant Shipping Act 1894 (Imp) (“the MSA 1894”) on limitation of liability: Sir John Jackson, Limited v Owners of the Steamship ‘Blanche’, Her Master and Crew & Ors [1908] AC 126 (The ‘Blanche’) in which the word ‘owner’ in ss 503 and 504 of the MSA 1894 was held to include demise charterers. Lord Loreburn said at 130:
…If this very elaborate Act of Parliament be examined, I find it impossible to resist the conclusion urged upon your Lordships by Mr Hamilton. The word “owner” is used in very many sections. Sometimes it means registered owner, which is, indeed, the primary sense. Sometimes it must also include beneficial owner. And in other parts it seems to me that it must of necessity also include a charterer by demise who has control of the ship and navigates her with his own master and crew. Otherwise the operation of the Act becomes impracticable.
To like effect, see McIlwraith McEacharn Ltd v Shell Co of Australia Ltd (1945) 70 CLR 175.
Other examples given were the Limitation of Liability for Maritime Claims Act 1989 (Cth) and its underlying convention (the Convention on Limitation of Liability for Maritime Claims, done at London 19 November 1976), the Geneva Convention on the High Seas 1958 the United Nations Convention on the Law of the Sea 1982 (UNCLOS) and the Convention on Conditions for Registration of Ships, done at Geneva on 7 February 1986.
Eighthly, reliance was placed on the breadth of meaning of the word “owner” in the Navigation Act 1912 (Cth) (like the SR Act, an act amended by the Act) and in particular ss 6(4) and 391 and Schedule 1 being the International Convention for the Safety of Life at Sea 1974 (SOLAS). That reliance was said to be reinforced by Article 2 of SOLAS and regulation 2 (as to the definition of “administration”) and regulations 4, 7(b), 10, 11, 13 and 14(c) in Chapter 1 of the Annex to SOLAS; Schedule 4 being the Load Line Convention and Schedule 8 being the International Convention on Tonnage Measurement of Ships.
Ninthly, the difference in wording between s 3(4) of the Administration of Justice Act 1956 (UK) and s 21 of the Supreme Court Act 1981 (UK) (the relevant terms of which will be discussed in due course) compared with ss 17, 18 and 19 of the Act reflected a policy change to identify a jurisdictional nexus at the time of the commencement of proceedings different from, and wider than, the notion of beneficial ownership in those English provisions.
Tenthly, it was said that registration as owner is more than an administrative recording, and is an internationally recognised act formally recording ownership. Registration, it was said, is itself a legal relationship with the ship and plays an indispensable part in the transfer of title and property of a registered ship to a purchaser. Title at law, it was said, remains in the registered owner (vide Lord Donaldson of Lymington MR in The ‘Evpo Agnic’), the bill of sale being for ‘shares’ in the ship being a concept brought into existence by registration legislation. Thus, it was said, registration is itself a sufficient proprietary interest to substantiate, for the purposes of arrest, the nexus between the relevant person and the res, here the ship.

Eleventhly, it was said that unless ‘registered owner’ were necessarily included in the meaning of the word ‘owner’, the jurisdiction of the Court could easily be evaded by subterfuges using ‘bare’ registered ownership, with the ‘real’ or ‘beneficial’ ownership held by companies of straw, shares in which might, as in some jurisdictions, be bearer shares. Thus, it was said, a conclusion that ‘owner’ in ss 17, 18 and 19 means ‘true’, or ‘real’ or ‘beneficial’ ownership in a strict property sense alone, not always extending to registered ownership, would subvert the policy of the Act.
In summary, it was said that the proper approach to statutory interpretation of provisions vesting jurisdiction in courts, the underlying policy inherent in the Act addressing Australia’s national interests and the underlying principles of international law and practice all favour the giving of a wide or expansive meaning to the word ‘owner’ in this jurisdictional provision as always including, if the ship be registered, the party registered as owner on any international register (other than a contemporaneous provisional registration). Looking at the question as one of Parliamentary intention, it was said that the word ‘owner’ so often in a maritime context, in both public law and private law, incorporates the meaning of registered owner as a reflection of the worldwide use of the ship registration system with such important consequences, that one would expect it to have been excluded specifically if the meaning of registered owner had not been understood as necessarily included in the meaning of ‘owner’. The argument proceeded both upon the basis that Freya, as the registered owner, always remained the ‘legal’ or ‘statutory’ owner and, upon the basis that all title in the ship and shares in her had passed to Alico before 3 June 2004.
Alico’s submissions
The primary submission of Alico was that the word ‘owner’ should be given its natural and ordinary meaning as a description of a legal (not using that word in any narrow sense) relationship with a thing, being a bundle of rights or powers in respect of the dominion over, and the right to alienate, the thing: see Yanner v Eaton (1999) 201 CLR 351, 368, The‘Iron Shortland’ at 546 and The ‘Maria Luisa’ at [61]. The notion of ‘ownership’ carries with it a connotation of dominion, ultimate control and ultimate title against the whole world: The ‘Maria Luisa’ at [62]. In the context of ships and arrest, particular importance has been placed on the right to sell, dispose of or alienate the ship: The ‘Permina 3001’ [1979] 1 Lloyd’s Rep 327, 329; The ‘Ohm Mariana’ (ex ‘Peony’) [1993] 2 SLR 698, 711; and Smith’s Dock Co Ltd v The ‘St Merriel’ [1963] P 247.
Registration, it was said, whilst often co-extensive with ownership in the above sense, does not, unless a relevant statute requires otherwise, create, as opposed to evidence (non-conclusively) ownership.
Under English and Australian law, it was said, ownership of a ship, even a registered ship, does not depend on registration. Registration is prima facie evidence of ownership, and though that is important and may in many cases be sufficient, it is not an incident of ownership, unless a relevant governing statute states otherwise.
The plaintiffs’ submissions were said to over-reach any proper jurisdictional nexus in Part III by making entry on any national register itself conclusive for the purpose of establishing the jurisdictional nexus, though for all other purposes (including any dispute in relation to ownership under the Act) ownership would be decided otherwise.
Such an approach would be inconsistent, it was said, with the approach in the United Kingdom and the many countries (including those in the Asia-Pacific region) which have adopted, as a legislative model, United Kingdom legislation.
To construe the words ‘owner’ and ‘ownership’ by reference to notions of property and dominion in the manner referred to above would not, it was said, give a narrow or municipal construction to parts of a statute intended to operate in an international context, since these are universally recognised jurisprudential concepts, not confined to common law systems. The legal content or meanings of the words ‘owner’ and ‘ownership’ may vary between countries and legal systems, but the underlying notions are universal.
The wider construction of ‘owner’ in other statutes, it was said, reflects evident purposes of the relevant legislatures in those particular contexts to widen the meaning of the word ‘owner’ beyond its ordinary meaning related to proprietary rights.
The intended jurisdictional link in s 17(b) can be drawn, it was said, from the 1952 Arrest Convention and the ALRC Report as providing access to the property of the relevant person if, amongst other things, at the time referred to in s 17(b) of the Act, that person is, in a proprietary sense, the ‘owner’ of the res. This interpretation, it was said, gives a full and complete reading to the words used consonant with their intended purpose.
This construction is consistent, it was said, with the underlying procedural theory of in rem actions and arrest reflected in chapter 8 of the ALRC Report. To accede to the submissions of the plaintiffs, it was said, would create a species of maritime lien or droit de suite inconsistent with the intention of the ALRC Report and of the Act, in particular s 6. Reference was made in this context to Shell Oil Co v The Ship ‘Lastrigoni’ (1974) 131 CLR 1, 6 and the ALRC Report at [136].
The construction propounded by Alico would, it was said, see Australian law operate in conformity with legislation in the United Kingdom, Hong Kong, Singapore and New Zealand and with the historical operation of English law. In this connection, reference was made to The ‘Iran Amanat’ at [20].
The words of s 17 should be construed within the context, and for the purpose, of the arrest, not in the context, or for the purpose of, other Acts or conventions, even though they may be maritime in character.
As to the question of residual or ‘legal’ ownership, it was submitted that full title to the ship passed upon or after delivery of the bill of sale, delivery of the ship and full payment being made.
The Proper Construction of ss 17, 18 and 19 of the Act and the Phrase ‘the Owner’ therein.
Our view in summary
In our view, the meaning of the phrase ‘the owner’ in ss 17, 18 and 19 of the Act does not necessarily encompass the party entered on any international register of ships. The question is one as to whether the relevant person answers the description of ‘the owner’ in a proprietary sense, in all the circumstances. In our view, in the circumstances here, Freya was not ‘the owner’ of the ship at the commencement of the proceeding.
In these circumstances, there was no authority in the Act to proceed against the ship in rem by commencing the proceeding on 3 June 2004 and, consequently, the writ in rem should be set aside.
Reasons for our view
The meaning of the phrase ‘the owner’ in s 19 of the Act was considered by the Full Court in The ‘Maria Luisa’. The argument before us proceeded on the basis that the word ‘owner’ has the same meaning in ss 17, 18 and 19 of the Act. Plainly, that assumption was correct.
In The ‘Maria Luisa’, in dealing with the word ‘owner’, Tamberlin J and Hely J said at [61]-[66] and [72]:
The word "owner" cannot be given any general description. But ordinarily the incidents of ownership of a chattel include the right to make physical use of the chattel, the right to the income from it, the power of management, and the right of alienation: Lawson & Rudden (supra) at p 8. In the "Iron Shortland" (at 544) Sheppard J quoted from the decision of the Singapore Court of Appeal in The "Ohm Mariana" The ex "Peony"; Pacific Navigation Co Pty Ltd v Owners "Ohm Mariana" ex "Peony" [1993] 2 SLR 698 that the term "owner" means any person who is vested with such ownership as to have the right to sell, dispose of or alienate the ship, and that a beneficial owner of the ship comes within that term. See also to similar effect "The Permina 3001" [1979] 2 Lloyd´s Rep 327, 329.
The notion of "ownership" carries a connotation of dominance, ultimate control and of ultimate title against the whole world: cf O W Holmes The Common Law 1882 at 242-246; Blackstone´s Commentaries , 18^th ed. 1829, Vol 2, at 389; and Holdsworth, A History of English Law, 1925 vol VII at 449.
In Jeffries v Great Western Railway Co (1856) 5 E.& B. 802, at 805, Lord Campbell CJ said:
"I am of opinion that the law is that a person possessed of goods as his property has a good title as against every stranger, and that one who takes them from him, having no title in himself, is a wrongdoer, and cannot defend himself by shewing that there was title in some third person; for against a wrongdoer possession is a title."
That approach was applied by the Court of Appeal in "The Winkfield" [1902] P 42 at 55 by Collins MR. These statements accord with the primary definition of "owner" in The Oxford English Dictionary as:
"(a) . One who owns or holds something as his own; a proprietor; one who has the rightful claim or title to a thing (although he may not be in possession) ."
A helpful description of "ownership" is formulated by Jordan CJ in Gatward v Alley (1940) 40 SR (NSW) 174 at 178, where his Honour said in relation to a question as to ownership of a car:
"A good title to property, in the sense of such ownership as the law allows, consists in having the legal right to exercise with respect to it all such rights, as against all such persons, as by law are capable of being exercised with respect to property of the class in question. A person who has possession of property but not ownership has, as a general rule, the same legal rights as the owner, save to the extent to which those rights are qualified as against the owner ."
Ownership, whether legal or equitable, therefore involves something greater than beneficial interest. Equitable ownership of property is commensurate with the right to relief in a Court of Equity: The Trustees Executors & Agency Co Ltd v The Acting Federal Commissioner of Taxation (1917) 23 CLR 576 at 583; Meagher, Heydon and Leeming, Meagher, Gummow & Lehane´s Equity Doctrines & Remedies 4^th ed. 2002 at [4-120]. If a person has contractual rights in relation to a ship which, if performed will result in the person becoming the owner of the ship, then the person will be regarded as the equitable owner of the ship provided that specific performance of the contract would be decreed: KLDE Pty Ltd v Commissioner of Stamp Duties (Qld) (1984) 155 CLR 288, 296-297. Thus entitlement to a vesting order or equivalent relief would be necessary before AFE could be regarded as the equitable owner of the ship as at the relevant date: Stern v McArthur (1988) 165 CLR 489, 523-524; Chan v Cresdon Pty Ltd (1989) 168 CLR 242, 252-253. But that does not mean that AFE does not have an interest in the trust property, including the ship, which equity would protect regardless of whether AFE could be called the equitable owner.
…
A sole shareholder in a company has the ability to become the owner of the company´s assets (subject to the position of creditors) by liquidating the company, and distributing its assets in specie. But the company´s property has never been regarded as the property of its members, or even of its sole member, by reason only of the existence of the practical power which the member has in that respect. AFE had the practical ability to collapse the trust as at the relevant date, and had it done so, AFE and not Everdene would have been the owner of the ship at the relevant date (subject to the qualification previously referred to). But "owner" in s 19(b) of the Act is concerned with title to, or proprietorship of the ship at a particular point in time. Such capabilities as AFE had in relation to the ship at the relevant date lack the directness and immediacy necessary to confer on AFE title to or ownership of the ship as at that date. The existence of a power in AFE to cause Everdene to terminate the trust does not have any impact prior to the exercise of the power upon Everdene´s ownership of the ship. It simply means that ownership existing at a point in time could be displaced thereafter by unilateral action.
Neither party contended that The ‘Maria Luisa’ was wrongly decided.
The Full Court decided The ‘Maria Luisa’ in the context of the earlier decision of Sheppard J in The ‘Iron Shortland’ that the word ‘owner’ was not restricted to registered owner, but extended to include the ‘true’ or ‘real’ or ‘beneficial’ owner. It was not necessary for the Full Court to decide the question before us, that is whether the phrase ‘the owner’ necessarily includes the registered owner.
The consistent use of the word ‘owner’ and the phrase ‘the owner’ in ss 17, 18 and 19 avoids the necessity (as it was unnecessary for Sheppard J in The ‘Iron Shortland’ and the Full Court in The ‘Maria Luisa’) to choose between the views of the English Court of Appeal and the Hong Kong Court of Final Appeal, on the one hand, and the Singapore Court of Appeal, on the other, as to the meaning of the word ‘owner’ where it appears in their cognate arrest provisions identifying the first connecting relationship at the time of the accrual of the cause of action, in juxtaposition with the phrase ‘beneficially owned in respect of all the shares’ identifying the second connecting relationship at the time of the institution of suit or arrest. See generally: The ‘Evpo Agnic’; Haji-Ioannou v Frangos [1999] 2 Lloyd’s Rep 337, 353; and The ‘Tian Sheng No 8’ [2000] 2 Lloyd’s Rep 430, 433 and 438-9 where ‘owner’ was construed as ‘registered owner’; and The ‘Ohm Mariana’ (ex ‘Peony’) where ‘owner’ was construed as, or at least as including, ‘beneficial’ or ‘real’ owner. The material terms of the legislation considered in those cases can be understood by reference to s 21(4) of the Supreme Court Act 1981 (UK) which was in the following terms:
In the case of any such claim as is mentioned in section 20(2)(e) to (r), where:
(a) the claim arises in connection with a ship; and
(b) the person who would be liable on the claim in an action in personam ('the relevant person') was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against –
(i)that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or
(ii)any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.
[emphasis added]
Whether the phrase ‘the owner’ in ss 17, 18 and 19 includes the person entered on any national ship register in the world depends upon (a) the breadth of the phrase ‘the owner’ in Part III of the Act, (b) the legal consequences of the relevant registration, and (c) the surrounding factual circumstances.
the breadth of the phrase ‘the owner’ in ss 17, 18 and 19
In Chapter 8 of the ALRC Report, the authors discussed at some length various possible forms which the anticipated reforming legislation might take. In particular, the discussion concerned the relationship between maritime liens and the statutory right of action in rem and the competing theories underlying arrest and Admiralty practice: the personification theory and the in personam theory. As to these theories, see generally, ALRC Report pp 13-14 [17]; Wiswall The Development of Admiralty Jurisdiction and Practice since 1800, especially chapter 6; Marsden Select pleas in the Court of Admiralty, Selden Society Vol 1 1894 pp 1xxi-1xxii; Republic of India v. India Steamship Co Ltd (No.2) (The ‘Indian Grace’) [1998] AC 878, 906-909; and Davies “In Defence of Unpopular Virtues: Personification and Rectification” (2000-2001) 75 Tul L Rev 337. The ALRC made a number of clear choices in its recommendations. First, no new maritime liens were to be created: see [121] of the ALRC Report. Secondly, the statutory action in rem was to be broadly in line with the generally accepted scope of the action in comparable countries. It is appropriate to set out the whole of [136] (without footnotes) of the ALRC Report:
Recommendation. As these views suggest, the matter involves a basic question of trade or transport policy for Australia, and one on which different views can reasonably be held. The Commission has concluded that, on balance, it is not desirable at the present stage to go beyond the generally accepted scope of the statutory right of action in rem in comparable countries. The justification for admiralty jurisdiction, as a universal jurisdiction dependent only on local service of process on the res, depends on its broad international acceptance. Admiralty jurisdiction, as an exception to a basic principle of territoriality, is clearly in Australia's interests. There would be little justification for relying on the international consensus supporting admiralty for one purpose and to reject it for another, closely related one. It is true that the Brussels Convention can be construed as allowing arrest on a maritime claim without reference to in personam liability. But, apart from the question whether this is the better interpretation of art 3 and 7, having regard to the French text of the Convention, the Convention has not been taken to this extent in countries such as the United Kingdom, Canada, Singapore or New Zealand. Moreover, at the Lisbon meeting of the Comite Maritime International in 1985 which produced a draft revision of the Arrest Convention, there was finally very substantial support - after strong earlier disagreements on this issue - on a text which limits the right of arrest to liabilities of owners and demise charterers. Jurisdictions such as Singapore, Hong Kong, New Zealand, South Africa and Canada have not extended the right of action in rem to any greater extent. The provisions of the Supreme Court Act 1981 (UK) which provide for an action in rem with respect to demise charterers' liabilities have been said to be working well and resolving most difficulties. For these reasons a statutory right of action in rem with respect to any claim, other than a claim directly involving the possession of or a proprietary interest in the ship, should only be able to be brought where, when the action is commenced, the owner or a demise charterer of the ship is a relevant person in respect of the claim. In accordance with the view expressed in para 80 and 127, a provision to this effect will not present constitutional difficulties under s 76(iii), since, even if the narrower 'procedural' view of s 76(iii) were to be taken, the liability in question would be the liability of a person with a proprietary interest (that is, as owner or demise charterer) in the ship at the relevant time. The enforcement by an action in rem of this liability can properly be described as procedural, having regard to the history of admiralty jurisdiction.
[emphasis added]
Owner, sister ship and demise charterer arrest were to be provided for, as they were in ss 17, 18 and 19 of the Act, respectively. Essential, in the ALRC’s view, to each of such arrests was the necessary connection, of a proprietary kind, between the person said to be liable (the owner or demise charterer) and the ship, at the second of the relevant times – the institution of the suit. This was not to take a narrow municipal view of the action in rem, or of Australian arrest procedure. Rather, it was recommended in order to ensure that Australia’s arrest regime was broadly in line with comparable international practice. Also, the clear linking, in a proprietary sense, between the party presumptively liable and the property belonging to that party which was to be subject to arrest ensured that possible arguments as to over-reaching s 76(iii) of the Constitution by creating substantive rights by way of a new maritime lien or a droit de suite did not arise: cf the ALRC Report Ch 5; The Owners of the SS ‘Kalibia’ v Wilson (1910) 11 CLR 689, 704 and 715; R v Turner; Ex parte Marine Board of Hobart (1927) 39 CLR 411, 447-8; Zelling “Of Admiralty and Maritime Jurisdiction” (1982) 56 ALJ 101, 105; and The ‘Shin Kobe Maru’ at first instance (1991) 32 FCR 78, 86-87 and 101-111.

Since no foreign law has been proved, the issue of the operation of the so-called presumption that foreign law is the same as the law of the forum arises. The plaintiffs submitted that, in the absence of proof of Liberian or other foreign law, the SR Act should be read as applying, mutatis mutandis, to a Liberian registered ship. No detailed argument took place on this issue. It may be doubted whether an Australian statute in terms directed only to Australian-owned ships is properly the subject of the presumption in these circumstances. In Damberg v Damberg (2001) 52 NSWLR 492 at 505-518 [118]-[147] Heydon JA (as his Honour then was) examined the authorities on the so-called presumption. That analysis reveals the difficulties of, and disparities in approach to, its application. Some authorities limit the presumption to non-statutory law. Some extend the presumption to statutes. Some, whilst accepting the presumption as extending to statute law, require that the statute law not be peculiar to local situations or linked to local conditions or to establishing regulatory requirements. Thus, to the extent that statute law can be seen as part of the ‘general law’ of the law of the forum, it will form part of the presumption. See, in particular, the different approaches in Purdom v Pavey & Co (1896) 26 SCR 412; Hellens v Densmore [1957] SCR 768, 780; Gray v Kerslake [1958] SCR 3; The Ship ‘Mercury Bell’ v Amosin (1986) 27 DLR (4^th) 641; and Schnaider v Jaffe [1916] CPD 696, all referred to by Heydon JA in Damberg v Damberg.
The SR Act is a piece of legislation with an Imperial provenance as to its form and which has counterparts all over the world, including in Liberia, dealing with registration. (The evidence reveals a register in Liberia and see also Coles op cit chapter 15.) Thus, the SR Act and its subject matter have a degree of universality. It is not an Act directed specifically to peculiarly Australian conditions, but it does create a local regulatory environment concerned with Australian-owned ships. Notwithstanding these doubts, we are prepared to deal with the matter on the basis that if foreign, in particular Liberian, law is relevant to the assignment of the ship, it is to be presumed that that law contains a statute in a form, mutatis mutandis, the same as the SR Act in the manner referred to in The Ship ‘Mercury Bell’ v Amosin at 652 (see Damberg v Damberg at 513).
Assuming that the SR Act is applicable to the controversy, it is clear that the SR Act, in its own terms, and framed as it clearly was (see McPherson J in General Credits (Finance) Pty Ltd v Registrar of Ships (1982) 61 FLR 329, 334) by reference to the MSA 1894, does not provide title by registration. The register is evidence of title only: s 77. Ownership precedes, and, indeed, is a requirement for, registration. See also The ‘Spirit of the Ocean’ (1865) 34 LJ Adm 74 at 76 as to the Imperial legislation preceding the consolidating MSA 1894.
Nevertheless, various provisions dealing with statutory methods of transfer (ss 36 and 42), transmission (ss 37 and 43), priorities (s 39), power of disposition (ss 41 and 45), the recognition, but not entry, of trusts and equities (ss 46 and 47) and rectification and correction of the register (ss 59 and 60) in a number of respects displace or modify the legal rules that would otherwise regulate parties’ rights: General Credits (Finance) Pty Ltd v Registrar of Ships at 334 and the cases there cited.
The case law in England and Australia does not illuminate with absolute clarity the nature or character of the interests that pass after a sale (or transfer of mortgage) before registration. There is sometimes a difference expressed as to whether ‘legal’ or ‘beneficial’ title passes before registration under a completed sale. In Stapleton v Haymen (1864) 2 H & C 918; 33 LJ Ex 170; 159 ER 380 Pollock CB said that the vendor was a trustee for the buyer, but Martin B said that property vested in the buyer giving him good legal title. In Hughes v Sutherland (1881) 7 QBD 160, Lord Coleridge CJ explained Stapleton v Haymen as a case recognising the passing of the equitable interest in the ship. Dr Lushington in The ‘Spirit of the Ocean’ at 76 appeared to express a view conformable with that of Martin B, as did Sir Robert Phillimore in The ‘Two Ellens’ at 355. See also Watson v Duncan (1879) 6 Ct of Sess Cas (4^th Ser) 1247, 1251, 1252; The ‘Jane’ (1870) 23 LT 791 at 792; Temperley p 20; The ‘Bineta’ [1966] 2 Lloyd’s Rep 419, [1967] 1 WLR 121 per Brandon J; and The ‘Bosna’ at 115 per Mitchell J. Sometimes the registered owner is seen as necessarily being the legal owner: The ‘Evpo Agnic’ at 1096.
A debate in these terms may be necessitated by the particular context (particularly statutory context) in which the question arises: for example, s 31(1)(a) of the Stamp Duties Act 1923 (SA) considered by Bollen J in 695113 Ontario Ltd v Commissioner of Stamps SA (1990) 53 SASR 274. We prefer to approach the matter by construing the statute and deriving from its provisions the proper description of the rights of the parties.
Section 36 of the SR Act and reg 23 of the Shipping Registration Regulations are in the following terms:
SECT 36    Transfer of ship etc.
(1) Subject to section 37, a ship or a share in a ship shall be transferred by a bill of sale made in accordance with the regulations.
(2) Where a ship or a share in a ship is so transferred, the bill of sale and a declaration of transfer made by the transferee under subsection (3) shall be lodged by the transferee with the Registrar within 14 days after execution of the bill of sale or within such longer period as the Registrar, in special circumstances, allows.
(2A)The Registrar shall, as soon as practicable after the lodgment by the transferee of a bill of sale relating to the transfer of a ship or a share in a ship together with a declaration of transfer, register the bill of sale by entering in the Register the name of the transferee as owner of the ship or share and shall endorse on the bill of sale the fact of the entry having been made, together with the date and time of the making of the entry.
(3) A declaration of transfer for the purposes of subsection (2) shall be made in accordance with the regulations and, where the transferee is not the Commonwealth or a State or Territory, shall include:
(a) in the case of the transfer of a ship, or a share in a ship, other than a small craft:
(i)a statement specifying the nationality of the transferee or, where the transferee is a body corporate, the country in which it was incorporated; and
(ii) a statement that, to the best of the knowledge and belief of the person making the declaration, the ship concerned will not cease to be an Australian-owned ship by reason only of the transfer; or
(b) in the case of the transfer of a ship, or a share in a ship, being a small craft:
(i) a statement specifying the nationality of the transferee or, where the transferee is a body corporate, the country in which it was incorporated;
(ii) a statement specifying the normal place of residence of the transferee or, where the transferee is a body corporate, the principal place of business of the body corporate; and
(iii) a statement that, to the best of the knowledge and belief of the person making the declaration, the ship concerned will not cease to be an Australian-owned ship or a ship referred to in paragraph 14(b) or (c) by reason only of the transfer.
(4) Subsection (3) applies in relation to ships on demise charter to Australian-based operators as if the statement required by subparagraph (3)(a)(ii) or (3)(b)(iii) were a statement that, to the best of the knowledge and belief of the person making the declaration, the ship concerned will not cease to be a ship on demise charter to an Australian-based operator by reason only of the transfer.
(5) Bills of sale lodged under this section shall be registered in the order of their lodgment.
REG 23Transfer of ship etc
(1) A bill of sale for the purposes of subsection 36 (1) of the Act in relation to a ship shall:
(a    specify:
(i) the name and official number of the ship;
(ii) the number of shares in the ship to which the bill of sale relates;
(iii) the name and address of each transferor;
(iv) the name and address of each transferee; and
(v) particulars of any mortgage registered in relation to the ship; and
(b)   be duly signed by each transferor.
The bill of sale here complied with the requirements of s 36(1) and reg 23.
Notwithstanding that Alico, as transferee, took a bill of sale in a form compliant with s 36 and reg 23, that it took unconditional delivery of the ship and that it paid for the ship in full unconditionally, its position must be examined in the lightof, not only s 36, but also ss 45, 46 and 47 of the SR Act which are as follows:
SECT 45 Powers of disposal by owner
The owner of a ship or of a share in a ship has power, subject to this Act and to any rights and powers appearing in the Register to be vested in any other person, absolutely to dispose of the ship or share and to give effectual receipts in respect of the disposal.
SECT 46 Trusts not recognized
Notice of a trust, express, implied or constructive, shall not be entered in the Register or be receivable by the Registrar.
SECT 47 Equities not excluded
Subject to sections 41, 45 and 46, beneficial interests may be enforced by or against the owner or mortgagee of a ship or of a share in a ship in respect of his or her interest in the ship or share in the same manner as in respect of any other personal property.
The immediate provenance of these provisions is ss 56 and 57 of the MSA 1894.
We accept that the significant purpose of s 45 (and of s 41, in respect of mortgages) is to protect the registered owner who takes from a prior registered owner (or mortgagee). In that sense it is “protective”: see Bollen J in 695113 Ontario Ltd v Commissioner of Stamps SA at 281. Nevertheless, the statute, in plain terms, confers the power of absolute disposition on the party who is named on the register as ‘owner’. It is unnecessary, we think, to characterise that as ‘legal title’. It is a statutorily conferred power. Section 36 deals with transfer; though the reading together of ss 36, 45 and 47 and the use of language in s 47 of ‘beneficial interests’ (having its origins in s 3 of the MSA 1862, and later in s 57 in the MSA 1894) may give support to the characterisation, for a relevant purpose, of the seller as holding a ‘legal title’: cf 695113 Ontario Ltd v Commissioner of Stamps.
The present context does not call for such a characterisation. The question is whether, on 3 June 2004, Freya was ‘the owner’ of the ship. If the SR Act is relevant for the reasons discussed, it can be concluded that Freya had transferred the ship and all shares in her, but remained vested with a statutory power absolutely to dispose of the ship (subject to entries on the register).
A power of that kind may well, in many circumstances, suffice to support the conclusion that the holder of such power was ‘the owner’. It is a power which is the equivalent of the epitome of ownership. A party who has power absolutely to dispose of a chattel has the equivalent of the ultimate incident of ownership. The power derives from statute; it is not a ‘right’ arising from a consensual transaction; but it is a power having equivalent effect.
The task to which we are directed is the interpretation and application of the phrase ‘the owner’ in s 17 of the Act. The rights or powers, dominion or control which might lead to a conclusion that someone is the owner of a ship may derive from dealings between the parties, and the general law governing those as affected by relevant statute law. Here, on the hypothesis upon which we are proceeding, the relevant statute vested in Freya a power absolutely to dispose of the vessel.
It is necessary, however, to assess the importance of this power in Freya’s hands by reference to the surrounding factual circumstances.
the surrounding factual circumstances
The facts have been earlier set out. A reading of the agreement dated 15 April 2004 makes it clear that the parties intended that title was to pass fully no later than by the time of full payment, delivery of a complying bill of sale and other required documents and delivery of the ship, all of which occurred on or by 25 May 2004. Using a standard form internationally recognised contract, and using a standard form bill of sale which conformed with the requirements of the only shipping registration legislation before the Court, Alico paid unconditionally in full for the ship and took delivery, possession and control of her.
Under Australian law, and, we would venture to suggest, the law of any other country, subject to any statute affecting the position, Alico took full property in the ship.
On the assumption that the SR Act applies, Freya had a power, given by statute, absolutely to dispose of the ship. In the circumstances that obtained, however, Freya could not, on any view, exercise that power lawfully or honestly without the consent of Alico. It had transferred the ship, relinquished its rights in her and been paid in full for her. No circumstance could be shown for the honest or lawful exercise of the statutory power, without the consent of Alico.
In these circumstances, the holding of the statutory power of absolute disposition was empty of real and practical meaning or significance. So to conclude is not to change the content of the power, but to direct attention to the relevant question to be answered. Was a party who had entered and completed this transaction and who held a statutory power (the primary purpose of which was the protection of the next registered owner, conformably with honest dealing, who had taken the property according to the transaction just completed) in circumstances where there could be no occasion for the honest and lawful use of the power, ‘the owner’ of the ship?
In our view, the answer to that question is ‘no’. Freya had no rights of dominion, enjoyment or control over the ship arising from its dealing with Alico or from its relationship with the ship. It had, by the law of the flag (on the hypothesis of the relevance of the SR Act by the presumption) a power to dispose of the ship, but that power was incapable of lawful or honest exercise, without the consent of Alico. So understood, the power does not amount to a right of ownership.
Miscellaneous matters
Whether our view leads to inconvenience or improbability
The view that we have reached is plainly conformable with the expressed intention of the ALRC. It accords with how the pre-existing law in England and Australia had been applied. It accords with modern practice in cognate jurisdictions where the test is ‘beneficially owned as respects all the shares’, or a comparable expression: Vostok Shipping (New Zealand); The ‘Ivanovo’ and The ‘Andres Bonifacio’ (Singapore); The ‘Igor’ [1956] 2 Lloyd’s Rep 271 (England); The ‘Jensen Star’ [1990] 1 FC 199 and Gold et al Maritime Law (2003) pp 763-64 (Canada).
Our decision does not reduce the importance of the certificate of registration. If we may say so, we see great force in the general thrust of what was said by G P Selvam J in The ‘Kapitan Temkin’ at [7] (without being taken to agree with everything there said). However, certificates of registration and entries on national registers do not operate in a legal vacuum. If, as in Part III of the Act, the phrase ‘the owner’ means the party who, in a proprietary sense, owns the ship, then the rights or powers, if any, created or held because of registration, must, by the operation of Australian law, including its rules of private international law, be made applicable and relevant to the enquiry. The result of the enquiry in the present case conducted as we have described, is that Freya was not ‘the owner’.
This does not mean that plaintiffs seeking to arrest ships under Part III of the Act will be thrown into some position of peculiar disadvantage. Proof of registration will provide prima facie evidence of ownership. Depending on the law of the flag state, or any other relevant foreign law, questions of the effect of statutes dealing with registration or cognate issues may arise. Even if they do not, a defendant or other person seeking to show that the registered owner is not ‘the owner’ will be required to show (by admissible evidence and on a final basis: The ‘Zoya Kosmodemyanskaya’ (1997) 79 FCR 71) that such rights or powers as may be conferred on a registered owner under any relevant law no longer exist or are not capable of being exercised honestly and lawfully. (We are not to be taken as stating that the position is other than that the plaintiff must justify its claims to statutory authority. Rather, we refer to the reality that if the inference to be drawn from the register is to be dealt with by evidence led on behalf of the defendant that evidence must be admissible.)
We appreciate what the authorities say about the nature of the task facing a plaintiff in justifying the assertion of statutory authority in the face of a challenge to it after an arrest: see the authorities referred to by Richardson P and Blanchard J in Vostok Shipping at [20] including The ‘Shin Kobe Maru’ in the High Court; cf The ‘Shin Kobe Maru’ at first instance (1991) 32 FCR 78, 82-4 and Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369, 391. It is a matter that, on the authorities, should, in the ordinary course, be dealt with in advance of the hearing: Vostok Shipping at [20]; I Congreso del Partido [1978] QB 500; The ‘Nazym Khikmet’ at 363; The ‘St Merriel’; Medway Drydock Engineering Co Ltd v Owners of the ‘Andrea Ursula’ [1973] QB 265; The ‘Aventicum’ [1978] 1 Lloyd’s Rep 184; The ‘Maritime Trader’ [1981] 2 Lloyd’s Rep 153; The ‘Saudi Prince’ [1982] 2 Lloyd’s Rep 255; Wo Fung Paper Making Factory v Sappi Kraft (Pty) Ltd [1998] 2 HKLR 346, 352; The ‘Tian Sheng No 8’ at 443; and The ‘Andres Bonifacio’ at 524. But it is a matter that need not necessarily be rushed on: Vostok Shipping at 44 (depending, of course, on whether an arrangement has been reached as to the release of the vessel, as it was here: see [2004] FCA 752 at [17] to [19]). This is particularly so in Australia, where the procedural question as to the effect of an unconditional appearance and the need for resolution of the issue of authority to commence in the context of a conditional appearance, which affected the approach in I Congreso del Partido and The ‘Aventicum’, is not an issue, because the arrest can be sought to be set aside after the filing of an unconditional appearance: The ‘Zoya Kosmodemyanskaya’. We leave to one side the question as to whether it is legitimate to use interlocutory procedures such as the compulsory production of documents in the course of resolving such an issue of jurisdiction (if it properly be so characterised): cf Baltic Shipping Co Ltd v Pegasus Lines SA [1996] 3 NZLR 641, 656; Advanced Cardiovascular Systems Incorproated v Universal Specialities Ltd [1997] 1 NZLR 186, 189; The ‘Ship Om’ (Laurenson J, NZ High Court October 2000); Bray v F Hoffmann-La Roche Ltd (2002) 118 FCR 1 and (2003) 130 FCR 317; Contender 1 Ltd v LEP International Pty Ltd (1988) 82 ALR 394, 63 ALJR 26; s 39B(1A)(c) of the Judiciary Act 1903 (Cth); and s 76(iii) of the Constitution. The significance of these issues may be conceded. However, to construe the phrase ‘the owner’ in Part III of the Act as including, in all cases, irrespective of whether it reflects the demonstrable position regarding rights and powers amounting to ownership, the party entered on any (other than a contemporaneously provisional) national shipping register, would go beyond the context and purpose of the Act and beyond the content of the words used in that context. It would, in effect, create a temporary lien or droit de suite. That consequence was not intended. It was specifically rejected in the Act by s 6 of the Act.
The ‘Rose Pearl’

It is necessary to say something about the decision of Kriewaldt J in The ‘Rose Pearl’. The case bears a striking similarity to the matter before us. A ship registered in Panama (the registered owner being a Liberian company (Crescent)) was arrested in Darwin for necessaries supplied to the ship. The defendant, Aitchison, asserted that, at the time of the arrest he, and not Crescent, was the owner. He relied on two bills of sale, one from Crescent Shipping to Vannen Steamship Corporation and the second from the latter company to himself. An extract of the Panamanian Register was tendered. The jurisdiction of the Supreme Court of the Northern Territory was conferred by the Admiralty Court Acts 1840 and 1861 (Imp) and the Colonial Courts of Admiralty Act 1890 (Imp). Kriewaldt J, after dealing with various submissions of the plaintiffs which sought to avoid the question of ownership at the time of the arrest, came to the crucial question: who was the owner on the day in question? Kriewaldt J concluded that Crescent was the owner. It is important to understand his Honour’s reasoning. First, his Honour rejected the tender of the two bills of sale for technical evidential reasons (see 232). Secondly, on the assumption that the two bills were admissible, his Honour decided that they were inadequate to effect a transfer, as they did not comply with the formal requirements of the governing legislation. Kriewaldt J invoked the presumption that the foreign law is the same as local law and said the following at 232:
…In the absence of any evidence as to foreign law, if any foreign law is the proper law to be applied to ascertain the effect of the two documents, I must assume the appropriate foreign law to be the same as the law which prevails in the Northern Territory. Under the law which prevails in the Northern Territory neither document would suffice to transfer ownership in the ship. The Bill of Sale from the Crescent Corporation is not in the form required by the relevant legislation and the Bill of Sale from the Vannen Steamship Corporation is defective not only in form but also in that it is not under seal.
Presumably, the applicable local law was the MSA 1894. What was the relevant applicable foreign law (Liberian, Panamanian or New York (where Crescent executed documents)) was said by Kriewaldt J to be a difficult question, which it was not necessary to answer because of the presumption that local law applied. His Honour said at 233:
…On those facts it may well be that whether the first Bill of Sale suffices to divest the Crescent Corporation of ownership should be determined according to Panamanian law, or according to the law of the State of New York, or even according to the law of the Republic of Liberia rather than according to the law of the Northern Territory. It may well be that under the appropriate foreign law both documents are effective to transfer ownership. Fortunately for me I do not have to decide which is the proper law to apply because I am bound to assume, until the contrary is proved, that the law in all these jurisdictions is the same as the law in the Northern Territory and here, as I have said, neither document would suffice to transfer the ship.
Thirdly, Kriewaldt J rejected the acts of apparent ownership or dominion as inadequate to prevail over ‘an established legal title’ and said at 233:
…hence until the formalities requisite to effect a transfer of ownership have been effected the Crescent Corporation must be taken to be the owner and as to when the formalities were completed the evidence does not disclose. In the absence of evidence as to foreign law I must assume that each of the two Bills of Sale required registration in some official registry.
It is important to recognise that the ‘formalities’ referred to by Kriewaldt J in that last passage were not just registration, but also execution of a bill of sale in proper form by reference to the governing law. An earlier passage at 232 had made clear Kriewaldt J’s views that, if the bills of sale had complied with the relevant legislation, there would have been a sale:
I have no doubt that these documents, if properly receivable in evidence and if effective for the purpose establish the sale of the ship to the defendant on or about 12th July, 1957.
…
Thus, The ‘Rose Pearl’ is not authority for the proposition that until foreign registration of the buyer the owner of the ship remains the existing (selling) foreign registered owner. It is authority for the proposition that the foreign registered owner (seller) remains the owner for the purposes of arrest (under the Admiralty Court Acts 1840 and 1861(Imp) made relevant by the Colonial Courts of Admiralty Act 1890 (Imp)) if the purported transfer is not adequately evidenced or is evidenced by a bill of sale not conforming with relevant legislation denominating how a transfer is to take place and if the transferee, in those circumstances, has not been registered.
Various arguments of the plaintiffs
Most of the arguments of the plaintiffs have been dealt with, in substance, by our reasons above. In particular, the reliance on various international conventions is not to the point in construing the words of s 17 in this respect. Further, our approach is not to give any narrow or municipal construction to the Act. Rather, it is to give full content to the words used, given the context in which they appear, and bearing in mind the international role that arrest plays.
The wide interpretation of the word ‘owner’ in the Merchant Shipping Acts in The ‘Blanche’ and in McIlwraith McEacharn is attributable to the use of words in different legislation bearing a different purpose. As Lord Loreburn LC said in The ‘Blanche’ at 130:
…The word “owner” is used in very many sections. Sometimes it means registered owner, which is, indeed, the primary sense. Sometimes it must also include beneficial owner. And in other parts it seems to me that it must of necessity also include a charterer by demise who has control of the ship and navigates her with his own master and crew. Otherwise the operation of the Act becomes impracticable. For example, the salutary provision that wages shall continue to run if not duly paid (s. 134(c)) would not apply at all where the ship is chartered by demise, for the “owner” could not be in default. Or again, the provisions for notice to owner and enforcement of charge contained in s 183 would be futile unless the word “owner” there referred to some one paying wages. Similar instances might be multiplied almost indefinitely, but it is unnecessary to enlarge upon this point, for it does not really admit of dispute.
A similar view was expressed in McIlwraithMcEacharn in the judgment of Jordan CJ in the Supreme Court (45 SR (NSW) 144) and in the judgments in the High Court.
The express recognition, as a general maritime claim in s 4(3)(b) of the Act, of a claim under Part II or IV of the Protection of the Sea (Civil Liability) Act 1981(Cth) means that, where there is a registered owner (for the purposes of the application of the underlying convention), a claim against it will be a general maritime claim under the Act. A ship owned by that registered owner may be the subject of a claim in rem. There is nothing, however, in s 4(3)(b) which necessitates a construction of the phrase ‘the owner’ different from that which we favour. It may be that, if a ship involved in a pollution incident is sold before the commencement of the suit in rem, she could not be arrested, even though her erstwhile registered owner would remain personally liable.
Clause 9 of the agreement does not advance the matter. It merely provides a remedy to Alico should there have been, unknown the parties, an enforceable maritime claim against the ship (as there would have been if the action in rem had been commenced before 25 May 2004).
The question of policy
It may well be that it would be in Australia’s national interest, in particular in simplifying and clarifying the factual issues likely to arise on applications of this kind, that the phrase ‘the owner’ should be defined to include, in addition to any person who may be the owner in the proprietary sense that we have discussed, any party entered on any international ship register (other than one contemporaneously registered on a provisional register) as owner, irrespective of any underlying rights of ownership, title, dominion, or power of disposition. (See Davies “What is ‘Ownership’ for the Purposes of Ship Arrest under the Admiralty Act 1988 (Cth)?” (1996) 24 ABLR 76). That, however, is not our view of the meaning of the phrase ‘the owner’ in ss 17, 18 and 19 of the Act. It does not reflect the policy that informed the ALRC Report.
The implementation of any such policy is for the Parliament.
The Constitutional question in the background
During argument, the Court asked whether notices should have been issued under s 78B of the Judiciary Act 1903 (Cth). Both sides submitted that none was necessary. No argument on any constitutional issue was made. On reflection, if the plaintiffs are correct in their submissions as to construction, the scope of s 76(iii) of the Constitution may possibly become relevant. To say this is not to express any view whatsoever on the issues referred to at [101] above. Given our views, however, these questions do not arise.
Conclusions
For the above reasons, an order should be made that the writ in rem be set aside.
We see no reason why Alico should have its costs up to the time by which the plaintiffs should reasonably be taken to have known of the true position. To that point, the plaintiffs were relying on what appeared on the face of an international register. After that point, the plaintiffs should pay the costs of the argument that they have lost. Evidence may be necessary to ascertain that date. The parties may be able to agree upon it. We propose to give the parties an opportunity to address that.
Also, the parties may need time to consider the position of the P&I club letter and any question about an application for special leave, if one is to be made.
Accordingly, we should presently make no other order than one standing the matter over to a date to be fixed in the near future (within 21 days) for the making of orders disposing of the application. It only remains to express our gratitude to solicitors and counsel for their considerable assistance.

I certify that the preceding one hundred and eighty six (186) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Ryan & Allsop.

Associate:
Dated: 29 April 2005

Counsel for the Plaintiffs:

Mr A W Street SC with Mr N Owens

Solicitor for the Plaintiffs:

Hicksons

Counsel for Alico:

Mr G Nell with Ms J Soars

Solicitor for Alico:

Ebsworth & Ebsworth

Date of Hearing:

18 November 2004

Date of Judgment:

29 April 2005

BETWEEN:	TISAND (PTY) LTD FIRST PLAINTIFF RICHARDS BAY IRON AND TITANIUM (PTY) LTD SECOND PLAINTIFF CHINA NATIONAL COMPLETE PLANT & EXPORT GUANGZHOU LTD THIRD PLAINTIFF
AND:	THE OWNERS OF THE SHIP MV "CAPE MORETON" (EX "FREYA") DEFENDANT
JUDGES:	RYAN & ALLSOP JJ
DATE OF ORDER:	29 APRIL 2005
WHERE MADE:	SYDNEY

JUDGES:	RYAN & ALLSOP JJ
DATE:	29 APRIL 2005
PLACE:	SYDNEY

Counsel for the Plaintiffs:	Mr A W Street SC with Mr N Owens
Solicitor for the Plaintiffs:	Hicksons
Counsel for Alico:	Mr G Nell with Ms J Soars
Solicitor for Alico:	Ebsworth & Ebsworth
Date of Hearing:	18 November 2004
Date of Judgment:	29 April 2005