Yellow Wood Holdings Pty Ltd v The Owners of the Ship MV "Cape Don"

[1996] FCA 32

CATCHWORDS

ADMIRALTY - Bank guarantee provided to avoid arrest of vessel - acceptance of guarantee by plaintiff in lieu of benefit of arrest - vessel left jurisdiction and traded - estoppel - no alternative security offered.

Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 - Appl

Yellow Wood Holdings Pty Ltd v The Owners of the Ship MV "Cape Don"
No. QG89 of 1995
Cooper J, Brisbane, 26 March 1996

IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
QUEENSLAND DISTRICT REGISTRY

No. QG89 of 1995

BETWEEN:

YELLOW WOOD HOLDINGS PTY LTD

ACN 009 155 015

Plaintiff

AND:

THE OWNERS OF THE SHIP MV "CAPE DON"

Defendant

JUDGE MAKING ORDER:           Cooper J

WHERE MADE:  Brisbane

DATE OF ORDER:  26 March 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The notice of motion filed 15 March 1996 by Transworld Investments Pty Ltd be dismissed;

1. Transworld Investments Pty Ltd pay the plaintiff's costs of and incidental to the notice of motion to be taxed.

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

IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
QUEENSLAND DISTRICT REGISTRY

No. QG89 of 1995

BETWEEN:

YELLOW WOOD HOLDINGS PTY LTD

acn 009 155 015

Plaintiff

AND:

THE OWNERS OF THE SHIP MV "CAPE DON"

Defendant

CORAM:  Cooper J

PLACE:  Brisbane

DATE:  26 March 1996

REASONS FOR JUDGMENT

On 20 June 1995, the plaintiff filed a summons against the vessel "Cape Don", and obtained a warrant for its arrest.  On 23 June 1995 Transworld Investments Pty Ltd ("Transworld") procured a bank guarantee from the ANZ Bank in favour of the plaintiff to secure  payment of the sum of $70,000 to the plaintiff as may be ordered by the Federal Court or as may be agreed between the plaintiff and Transworld.  Because of the bank guarantee, the warrant to arrest the vessel was not executed.  The vessel left the jurisdiction and has since traded. 

On 15 March 1996 Transworld filed a notice of motion seeking an order that the bank guarantee be released to Transworld.  Transworld seek to recover the guarantee on two bases.  Firstly, it is asserted that Transworld is no longer the owner of
the Cape Don.  Secondly, it is said that the vessel is within Australian waters.  The provision of the bank guarantee to avoid the consequences of an arrest and the acceptance of that guarantee by the plaintiff in lieu of the benefit of an arrest of the vessel gives rise to an estoppel in favour of the plaintiff (see Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 416 ff per Brennan J).

Transworld cannot now resile from a course of conduct which induced the plaintiff to alter its position and allow the vessel to leave the jurisdiction and trade possibly giving rise to further claims against it.  To allow the guarantee to be withdrawn would be to prejudice the plaintiff because it would be denied any security.  It is not sufficient to say that the plaintiff may now seek out the vessel because it is in Australian waters and have executed against it the warrant for arrest which issued on 20 June 1995.  It does not follow that by arresting the vessel now, the plaintiff can be put back in the same position it would have been had the arrest proceeded on or about 23 June 1995.

No alternative security is now offered by Transworld or any other entity claiming an interest in the vessel.  The bank guarantee also stands as security for the payment of the plaintiff's costs.  Those costs, having regard to the number of contested interlocutory applications, are not insubstantial.  If the plaintiff obtains the benefit of costs orders then, in the absence of payment of those costs, the plaintiff is entitled to have recourse to the bank guarantee for payment.

It is not sufficient to say that a personal guarantee of those costs is or may be available from some person interested in Transworld.  Accordingly, the application is dismissed with costs. 

THE COURT ORDERS THAT:

1. The notice of motion filed 15 March 1996 by Transworld Investments Pty Ltd be dismissed;

2. Transworld Investments Pty Ltd pay the plaintiff's costs of and incidental to the notice of motion to be taxed.

I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper.

Date:26 March 1996

Associate

Counsel for the Plaintiff:  Ms A Phillipedes

Solicitors for the Plaintiff:  Hemming and Hart

Solicitors for the Defendant:  GPS Spender Woodhead

Date of Hearing:  26 March 1996

Place of Hearing:  Brisbane

Date of Judgment:  26 March 1996