FEDERAL COURT OF AUSTRALIA
Virtu Fast Ferries Ltd v The Ship “Cape Leveque”
[2015] FCA 324
Citation: Virtu Fast Ferries Ltd v The Ship “Cape Leveque” [2015] FCA 324 Parties: VIRTU FAST FERRIES LTD v THE SHIP "CAPE LEVEQUE" (IMO 9684603) AS SURROGATE FOR THE SHIP "JEAN DE LA VALETTE" (IMO 955743) (FORMERLY AUSTAL YARD NO 248) File number: NSD 131 of 2015 Judge: RARES J Date of judgment: 20 March 2015 Catchwords: ADMIRALTY – arrest of surrogate ship – whether builder of nearly complete specialised ship or government purchaser was owner of ship for purposes of s 19(b) of the Admiralty Act 1988 (Cth) – whether purchaser of a ship had right to obtain order for specific performance of a contract for construction of the ship – where government had paid substantial sums to builder of multiple ships under contract and no dispute existed as to government’s entitlement to order for specific performance of contract of next nearly complete ship – whether builder was legal owner of ship –effect of separate legal and beneficial ownership of a ship for the purpose of establishing in rem jurisdiction under the Admiralty Act – whether ship was a government ship within the meaning of s 8 of the Admiralty Act Legislation: Admiralty Act 1988 (Cth) Cases cited: Astley v Austrust (1999) 197 CLR 1
Euroceanica (UK) Limited v The Ship “Gem of Safaga” (2009) 182 FCR 1
Re Aro Co Limited [1980] Ch 196
Shagang Shipping Co Limited v Ship “Bulk Peace” (as surrogate for the Ship “Dong-A Astrea”) (2014) 314 ALR 230
Tanwar Entreprises Pty Limited v Cauchi (2003) 217 CLR 315
Tisand Pty Limited v Owners of the Ship MV “Cape Moreton” (ex “Freya”) (2005) 143 FCR 43
Wolverhampton Corporation v Emmons (1901) 1 KB 515
York House Pty Limited v Federal Commissioner of Taxation (1930) 43 CLR 427Date of hearing: 20 March 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 51 Counsel for the Plaintiff: GJ Nell SC and JS Emmett Solicitor for the Plaintiff: Aus-ship Lawyers Counsel for the Defendant: AM Stewart SC and JG Simpkins Solicitor for the Defendant: Norton Rose Fulbright Australia Counsel for the Intervener: JA Hogan-Doran Solicitor for the Intervener: HWL Ebsworth
Table of Corrections 9 June 2015 On the second page of the cover sheet in the heading Counsel for the Plaintiff the words “and JS Emmett” after “GJ Nell SC” have been added. On the second page of the cover sheet in the heading Counsel for the Defendant the words “and JG Simpkins” after “AM Stewart SC” have been added.
IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 131 of 2015
BETWEEN: VIRTU FAST FERRIES LTD
PlaintiffAND: THE SHIP "CAPE LEVEQUE" (IMO 9684603) AS SURROGATE FOR THE SHIP "JEAN DE LA VALETTE" (IMO 955743) (FORMERLY AUSTAL YARD NO 248)
Defendant
JUDGE:
RARES J
DATE OF ORDER:
20 MARCH 2015
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The writ be…
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Details
- Case
- [2015] FCA 324
- Decision Date
CaseChat Overview and Summary
The case before the court involved Virtu Fast Ferries Ltd as the plaintiff and the ship "Cape Leveque" as the defendant. The dispute centered around the ownership and control of the ship, specifically whether the builder of the nearly complete specialized ship or the government purchaser held the title for the purposes of section 19(b) of the Admiralty Act 1988 (Cth). Additionally, the court had to determine if the purchaser of a ship had the right to obtain an order for specific performance of a contract for the construction of the ship, given that the government had paid substantial sums to the builder of multiple ships under contract and there was no dispute about the government’s entitlement to order specific performance of the contract for the next nearly complete ship. The court also had to examine the implications of separate legal and beneficial ownership of a ship for establishing in rem jurisdiction under the Admiralty Act, as well as whether the ship was a government ship within the meaning of section 8 of the Admiralty Act.
The primary legal issues before the court were the identification of the rightful owner of the ship "Cape Leveque" and the implications of this ownership for the court’s jurisdiction and the enforceability of contractual obligations. Specifically, the court had to determine whether the builder or the government was the legal owner of the ship and whether this ownership affected the builder's entitlement to claim for specific performance of the shipbuilding contract. Furthermore, the court needed to clarify the relationship between legal and beneficial ownership in the context of maritime jurisdiction and the enforceability of implied terms in shipbuilding contracts. The court also had to consider the broader implications for the government's rights and obligations under the Admiralty Act.
The court concluded that the writ must be dismissed with costs. The reasoning involved a detailed examination of the contractual arrangements between Virtu and Austal, as well as the legal principles governing maritime contracts and ownership. The court found that the government, as the purchaser, had the right to obtain an order for specific performance of the shipbuilding contract, thereby establishing the government as the legal owner of the ship. The court also determined that the builder was not the legal owner and that the separate legal and beneficial ownership did not affect the court's in rem jurisdiction. The court further held that the ship was a government ship within the meaning of the Admiralty Act, thereby affirming the government's rights under the Act. Given these findings, the court dismissed Virtu's claims and ordered that the plaintiff pay the costs to Austal Ships Pty Ltd.
ORDERS:
1. The writ be dismissed.
2. The plaintiff pay the costs of the relevant person, being Austal Ships Pty Ltd.
The primary legal issues before the court were the identification of the rightful owner of the ship "Cape Leveque" and the implications of this ownership for the court’s jurisdiction and the enforceability of contractual obligations. Specifically, the court had to determine whether the builder or the government was the legal owner of the ship and whether this ownership affected the builder's entitlement to claim for specific performance of the shipbuilding contract. Furthermore, the court needed to clarify the relationship between legal and beneficial ownership in the context of maritime jurisdiction and the enforceability of implied terms in shipbuilding contracts. The court also had to consider the broader implications for the government's rights and obligations under the Admiralty Act.
The court concluded that the writ must be dismissed with costs. The reasoning involved a detailed examination of the contractual arrangements between Virtu and Austal, as well as the legal principles governing maritime contracts and ownership. The court found that the government, as the purchaser, had the right to obtain an order for specific performance of the shipbuilding contract, thereby establishing the government as the legal owner of the ship. The court also determined that the builder was not the legal owner and that the separate legal and beneficial ownership did not affect the court's in rem jurisdiction. The court further held that the ship was a government ship within the meaning of the Admiralty Act, thereby affirming the government's rights under the Act. Given these findings, the court dismissed Virtu's claims and ordered that the plaintiff pay the costs to Austal Ships Pty Ltd.
ORDERS:
1. The writ be dismissed.
2. The plaintiff pay the costs of the relevant person, being Austal Ships Pty Ltd.
Orders
Orders of the court
1. The writ be dismissed.
2. The plaintiff pay the costs of the relevant person, being Austal Ships Pty Ltd.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Austal also contended that s 4(3)(n) could not support Virtu’s more exotic alternative claim in the arbitration that there was an implied term that Jean de la Valette would not be delivered if Austal knew or believed she might be suffering from widespread or significant latent defects that Virtu would not be able to reasonably discover at any pre-delivery inspection. If it were necessary to consider whether a general maritime claim could be based on the latter implied term, I would not have found that it was capable of being a term to be implied by law, and there were no facts pleaded to support it being a term implied as a matter of fact. Virtu made a further claim in the arbitration based on a corresponding implied representation by conduct allegedly made by Austal. Virtu alleged that Austal was in breach of that implied representation. Again, that claim raises difficulties under Australian law, particularly having regard to its apparent conflict with the express terms of cl 20 of the Virtu contract that provided an express warranty for defects in the vessel that appeared after delivery: cf Astley v Austrust (1999) 197 CLR 1 at 21-23 at [46]-[48] per Gleeson CJ, McHugh, Gummow and Hayne JJ.Conclusion For these reasons, I am of opinion that the writ must be dismissed with costs. Austal is entitled to an order for costs. The Commonwealth did not seek to be joined as a party or to intervene in the proceedings or interlocutory application, and so it is not appropriate to make an order now for costs in its favour.
Ratio Decidendi
Legal Principle Established
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