American Eagle Fishing LLC v The Ship "Koorale"

[2020] NZHC 1935

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2607

[2020] NZHC 1935

BETWEEN

AMERICAN EAGLE FISHING LLC

Plaintiff

AND

THE SHIP “KOORALE”

Defendant

CIV-2019-404-2609

BETWEEN

AMERICAN EAGLE FISHING LLC
First Plaintiff

TRADITION MARINER LLC

Second Plaintiff

AND

M & F FISHING INC

First Defendant

ALL OTHER PERSONS

Second Defendants

Hearing:

2 and 3 June 2020

Memorandum received 5 June 2020

Counsel:

G Blanchard QC, K F T Stolberger and B Versfelt for Plaintiffs (American Eagle Fishing LLC)

B J Marten for Defendants
(The Ship Koorale and M & F Fishing)

Judgment:

5 August 2020

JUDGMENT OF WHATA J

This judgment was delivered by me on 5 August 2020 at 3.00 pm,

pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: …………………………

AMERICAN EAGLE FISHING LLC v THE SHIP “KOORALE” [2020] NZHC 1935 [5 August 2020]

Prelude

[1]                 Two tuna fishing boats flying the flag of the United States collide on the high seas. One boat, the Koorale, limps to New Zealand for repairs. The other boat, the American Eagle, flees from a port in American Samoa, fish only half unloaded, to avoid service within that jurisdiction. Proceedings are then served on the Koorale in New Zealand. This judgment decides whether New Zealand is the proper forum for their dispute.

Introduction

[2]                 A fishing boat owned and managed by American Eagle Fishing LLC (AE) and Tradition Mariner LLC (TM) (together, AETM) collided with a fishing boat owned by M&F Fishing Inc (M&F) in the Pacific Ocean, near American Samoa (the collision). M&F brought its boat, the Koorale, to New Zealand for repairs. AETM commenced in rem proceedings on the Koorale in New Zealand (the in rem proceedings). It also applied to limit its liability under the Maritime Transport Act 1994 (MTA), which gives effect to the Convention on Limitation of Liability for Maritime Claims (LLMC) (the limitation proceedings). M&F filed in rem proceedings on AETM’s ship, the American Eagle, in American Samoa, but was unable to effect service. It has also commenced proceedings in the United States (US). This judgment is centrally about whether New Zealand is the proper forum for trial about the collision (the collision dispute).

Factual background

[3]                 The Koorale and the American Eagle collided on the high seas on 17 June 2019, south of Hawaii and east of Kiribati, while out fishing for tuna. The Koorale is currently here in Nelson, having arrived around late July 2019, and is still undergoing significant repairs resulting from the collision. The American Eagle also sought repairs here in Lyttleton, arriving in December 2019, and departing a month later once repairs were complete. The American Eagle’s exact current location is unknown, but it is believed to be at sea and fishing somewhere between the Marshall Islands and Kiribati. This much is agreed upon by the parties, however, they each provide quite differing accounts of how exactly the collision occurred.

The Koorale’s account

[4]The following is based on M&F’s American Samoan pleadings.

[5]                 Approximately half an hour before the collision, the Koorale was cruising on an easterly course when its crew spotted a school of fish (the school) approximately two miles off its starboard (left) side. The Koorale then turned towards the school and advanced directly towards it at full speed on a south-southeast heading, while the crew prepared to set their nets.

[6]                 The Koorale’s crew then spotted the American Eagle off the ship’s port (right) side about six or seven miles away from the school. The American Eagle then took a hard port turn towards the Koorale and began moving towards it at full or near full speed, with smoke apparently rising from its stack. The Koorale, nonetheless, continued towards the school because, in considering the American Eagle was farther away, the crew assumed no threat and believed it would simply pull up behind the Koorale. This would have accorded with the Navigation Rules and the “Group Code” customs and practices which provide that the closest vessel to a school has priority to attempt a set. At this point, the Koorale’s crew were on standby waiting to set upon the school.

[7]                 The Koorale drew nearer to the school and noticed the American Eagle changed course and started sailing directly towards the Koorale’s midship from about one and a half miles away. The Koorale crew grew concerned as to the risk of collision but still knew that it could be seen and ultimately believed the American Eagle would pass on. However, the American Eagle drew nearer, which ultimately forced the Koorale’s crew to take evasive action by pulling the vessel out of gear and into full reverse, while turning hard to starboard. The American Eagle supposedly took no evasive action and stayed its path, striking the Koorale on its port side. The Koorale suffered severe damage to its hull, machinery, equipment and supplies, but was still seaworthy.

[8]                 The Koorale’s crew began provisional repairs and were eventually assisted by a nearby crew from another vessel altogether. A brief radio exchange also occurred between the American Eagle and the Koorale’s respective masters – the Koorale

members were informed the American Eagle may have sustained some damage but was otherwise stable. The American Eagle’s crew did not assist the Koorale members and no further engagement occurred between the parties.

The American Eagle’s account

[9]                 To assist my understanding of the parties’ respective positions, I sought AETM’s account of the collision. It was helpfully provided by counsel after the hearing. It overlaps with that of M&F to the extent that both vessels were set upon catching the school and thereby grew close in proximity while at the high seas.

[10]              However, AETM claims the American Eagle was in fact always closer to the school. It had gained the vantage of the school on its port side and was in the process of setting its nets while the Koorale was still some way away. On that basis, the American Eagle’s crew also assumed the Koorale would give way in accordance with the customary rule specific to the relevant fishing territory that a vessel in position to set its nets has the right of way. The Koorale, nevertheless, stayed its course towards the school of fish, fast-approaching American Eagle’s starboard side. The American Eagle, shortly before the collision, took two turns at differing degrees, both to its port side, and at the same time as the second turn put its engine controls into neutral. Unfortunately, though, the response was not enough to avoid the collision. The Koorale took no evasive action and instead maintained its course and speed in attempting to cut across the American Eagle’s bows, causing the collision.

[11]              AETM also claims masters of the vessels apparently spoke to each other ten minutes after the collision, where assurance was given by the Koorale’s master that all crew were safe, and no assistance was needed. Following that conversation, the American Eagle, still being operational, continued its fishing expedition, while the Koorale went straight back to its base in American Samoa for repairs. The American Eagle eventually followed and returned to American Samoa after its fishing expedition that day.

Procedural background

[12]              In late November 2019, four months after the Koorale’s arrival in Nelson, AETM instigated the in rem proceedings against the Koorale, seeking compensation for damage suffered in the collision (CIV-2019-404-2607 – served on the Koorale in Nelson). The limitation proceedings, to limit its own liabilities from the collision under the MTA (CIV-2019-404-2609), were then served on M&F in Nevada.

[13]              Later, in December 2019, M&F filed applications in both proceedings seeking a stay on forum non conveniens grounds, on the basis that the US (which includes American Samoa for the purposes of admiralty law) is the proper forum for this dispute. M&F attempted as well to serve in rem proceedings against the American Eagle in the High Court of American Samoa, but as noted it fled the jurisdiction before service could be executed and has not returned since. In personam proceedings were also initiated by M&F in that Court against AETM but are no longer on-foot.

[14]              On 16 January 2020, AETM filed its preliminary act for these proceedings, setting out what it claims is, the procedure to be adopted in collision cases and a notice of motion for a limitation decree in accordance with its limitation proceeding.  On  31 January 2020, AETM then filed and served notices of opposition to M&F’s application challenging this Court as the appropriate forum for these disputes.

[15]              On 7 February 2020, M&F opted to file in personam proceedings in the US District Court for the Middle District of Florida against AETM, claiming loss and damage resulting from the collision. AETM filed affidavits in response and then a motion to dismiss the Florida-based proceeding.

[16]              As a result, the Florida proceeding, and part of the American Samoa proceeding, are still on-foot. Whether those proceedings will continue, however, will likely depend on the determination to be made in the present case, namely, whether this is the appropriate Court to resolve the collision dispute; or whether the matter should be left to the Admiralty Law of the US.

The present applications

[17]M&F have made the following applications:

(a)to set aside the notice of the collision proceedings or to stay those proceedings; and

(b)to set aside the notice of the limitation proceedings or to stay those proceedings.

[18]              The applications are supported by affidavits of Anthony David Ferreira, President of M&F; Jose Carlos Garces, mast man; Barry Ira Rose, attorney; and Daniel E Mooney, attorney. AE’s opposition is supported by evidence from Larry da Rosa, Fleet Manager for AE; Roy Joseph Dillon Hall Jr, attorney; and James F Moseley Jr, attorney. Their evidence addresses the circumstances of the collision; the actions taken by the parties afterwards; the procedural steps taken by the parties since, including the commencement of proceedings here, in American Samoa, and in Florida; as well as the appropriateness of the fora in New Zealand, American Samoa, and the US to try the collision dispute. I return to the evidence, where relevant, below.

Jurisdiction

[19]              As the in rem proceedings were validly served in New Zealand, M&F must show that New Zealand is not forum conveniens. However, as the limitation proceedings were served out of New Zealand, r 6.29 of the High Court Rules 2016 (HCR) applies. Relevantly, this rule requires AETM to show that the Court should assume jurisdiction based on the factors in r 6.28.5(b)-(d) of the HCR, namely:

(b)There is a serious issue to be tried; and

(c)New Zealand is the appropriate forum for the trial;

(d)Any other relevant circumstance support an assumption of jurisdiction.

[20]              M&F accepts that AETM’s proceedings raise a serious issue to be tried, but it does not accept that New Zealand is the appropriate forum.

Forum conveniens for the collision dispute

[21]As Lord Goff said in Spiliada:1

The basic principle is that a stay will only be granted on the ground of forum non conveniens where the Court is satisfied there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.

[22]              Lord Goff also laid out the threshold factors to be applied in relation to disputes about forum conveniens. These are helpfully summarised by our Court of Appeal in Wing Hung as follows:2

In considering whether another forum is more appropriate, the Court looks to the forum with which the proceeding has the most real and substantial connection. Relevant factors include issues of convenience or expense, availability of witnesses, the law governing the relevant transaction and the places where the parties resided or carried on business.

[23]The Court of Appeal also said:3

We accept that other relevant considerations also bear on the issue of appropriate forum. These include a cautious approach already discussed to the subjection of foreigners to the jurisdiction of a New Zealand Court; whether other related proceedings are pending elsewhere; whether the New Zealand court would provide the most effective relief or whether a foreign Court is in a better position to do so; whether overseas defendants will suffer an unfair disadvantage if a New Zealand court assumes jurisdiction; and any choice of jurisdiction previously agreed by the parties.

[24]              As Lord Goff also explained, assessment of forum conveniens must be undertaken in two stages.4 First, in general, the burden of proof rests on the defendant to persuade the Court to exercise its jurisdiction to grant a stay. Second, if the Court is satisfied there is an available forum, which is prima facie an appropriate forum for the trial of an action, then the burden will shift to the plaintiff to show there are special circumstances by reason of which justice requires the trial should, nevertheless, take place in this country.5

1      Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 at 476.

2      Wing Hung Printing Company Ltd v Saito Offshore Pty Ltd [2010] NZCA 502 at [45].

3 At [46].

4      Spiliada Maritime Corp v Cansulex Ltd, above n 1, at 476.

5      At 476.

[25]His Lordship also said:6

[…] There are cases where no particular forum can be described as the natural forum for the trial of the action. Such cases are particularly likely to occur … in Admiralty, in the case of collisions on the high seas. I can see no reason why the English Court should not refuse to grant a stay in such a case, where the jurisdiction has been founded as of right.

[26]His Lordship, however, added:7

[…] that if in any case, the connection of the defendant with the English forum is a fragile one (for example, if he or she is served with proceedings during a short visit to the country), it should be all the easier for him to prove that there is another clearly more appropriate forum for trial overseas.

The collision dispute

[27]              I turn then to examine the application in respect of the collision dispute by reference to the Spiliada factors.

Availability of alternative forum

[28]              M&F submits that both American Samoa (for the in rem proceedings) and Florida (for the in personam proceedings) are available and competent jurisdictions to resolve the collision dispute. M&F further submits the only reason the in rem proceedings have not been commenced in American Samoa is because the American Eagle fled the American Samoan jurisdiction (before offloading half its catch) to avoid service. It is also said that criticisms in evidence about the American Samoan or Floridian judicial processes should carry little, if any, weight because the central issue is whether there is an available civil procedure in those jurisdictions.

[29]              AETM’s response is that American Samoan jurisdiction is not currently available because the in personam proceedings were withdrawn in American Samoa and the in rem proceedings cannot be commenced until the American Eagle is served within the jurisdiction. It says there are problems with the infrastructure and accessibility of the American Samoan jurisdiction. This is said to include procedural problems (including that oral depositions must be taken, and witnesses must attend

6      At 477.

7      At 477.

trial) and there are no direct flights from mainland USA or New Zealand. Furthermore, Mr Moseley’s evidence is that the proceedings in Florida could be cost-prohibitive, in the order of $US750,000 to  $US950,000.8  This  is  compared to  the evidence of   Mr Hall Jr, who estimates a trial in New Zealand would cost between $US300,000 and

$US500,000.9 AETM have also applied for stay of the Florida proceedings on forum conveniens grounds and M&F has until 7 August 2020 to respond. Mr Moseley observes that the US Supreme Court established that the federal courts have broad discretion to dismiss a case to another jurisdiction based solely on whether it is a more convenient forum for the parties.10 It also appears that choice of law analysis has no place in the forum conveniens inquiry, and that it is simply a matter of forum suitability.11

Assessment

[30]              The American Samoan jurisdiction is not presently available to try an in rem proceeding and it is presently speculative to suggest it will become an available forum in the foreseeable future. Florida, however, provides an alternative forum, with competent jurisdiction, for the trial of the collision dispute. Concerns expressed about time to trial and costs of counsel (which may also be levelled at this jurisdiction) are not sufficiently material to discount the availability of the Floridian jurisdiction to hear and determine the collision dispute. I accept that it appears a Floridian court will look to avoid duplication if there is an available jurisdiction elsewhere to hear the matter. But that is not a good reason to hold that it is not presently an available forum. I am therefore satisfied that there is an alternative forum for the trial of the collision dispute.

Connection, convenience and expense/witnesses

[31]              M&F identify the following matters in support of its contention that proceedings should take place in the US. Vessel ownership and registration support an American jurisdiction. All boats are registered under the US flag – the Koorale’s

8      See Affidavit of James F Moseley Jr In Reply to Reply Affidavits (dated 1 April 2020) at [28.2].

9 See Affidavit of Roy Joseph Dillon Hall Jr in Support of Notice of Opposition (dated 29 January 2020) at [36].

10     Citing Gulf Oil Corp v Gilbert 330 US 501 (1947); Koster v Lumbermens Mut Cas Co 330 US 518 (1947); and Piper Aircraft Co v Reyno 454 US 235 (1981).

11     Citing Piper Aircraft Co v Reyno; and contrary authority Szumlicz v Norwegian American Line Inc 698 F 2nd 1192 (11th Circuit, 1983).

home port is Long Beach, California; and the American Eagle’s home port is Pago Pago, American Samoa (which is an unincorporated state of the US). Both parties are located within an American jurisdiction. M&F is located in Nevada, and the American Eagle is owned and managed by companies located in Florida. M&F also submit that the key witnesses as to fault (of which there are 18) are primarily based in the US, and none are based in New Zealand. Further, expert witnesses based in Seattle will also be required for evidence about the special repair standards required for the Koorale, and the surveyor for M&F is based in Hawaii and Washington State. Other experts about the rules of the sea will need to be called, most likely, from overseas locations. Lastly, while the Koorale is being repaired in New Zealand, a shipyard witness does not need to be called.

[32]              Specific regulatory issues are also said to be engaged, including an investigation pursuant to Title 14 of the US Code and related US Federal Regulations; and a parallel investigation conducted by the US National Transportation Safety Board (NTSB) under Title 49, Chapter 11, of the US Code and related US Federal Regulations. The “Jones Act” is also said to be engaged. This provides regulatory protection for the US domestic market by prohibiting foreign vessels, while requiring US vessels to be available in wartime; and special build/repair standards for certain ships, including the Koorale. In addition to the requirement for specialised US-based expert evidence, M&F submits that the Koorale’s interests will also be obliged to call these US-based witnesses and explain the US regulatory regime to a judge to address the delay in completing the repair project.

[33]              By contrast, AETM submits that the evidence about what happened and who was at fault will come from a small number of persons who witnessed the collision, namely, the fish masters and the masters of both vessels, and because they are regularly at sea, it does not matter where they come from. AETM also has CCTV footage which should limit the need for eye witness testimony and it makes no sense to have other persons from the ships or from other vessels give evidence. As to quantum, the surveyors involved for AETM are from Auckland and “rules of the road” or the Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREGS), have universal application, so any mariner could sensibly give evidence about them.

[34]              AETM also submits that the location of the parties in the US is a matter deserving of little weight as nothing in this case connects with AE or TM’s place of incorporation – the vessels fly the US flag but spend most of their time fishing in the high seas, in the Pacific Ocean; and M&F operates in Pago Pago, but AE does not. There is also the evidence from Mr Moseley. He believes that the majority of the eye witnesses reside outside of the Middle District of Florida and the US. Also, these witnesses will need to follow a deposition procedure, which will be time-consuming; most of the evidence of M&F’s damage claim will come from witnesses located outside of the District of Florida; and an overwhelming majority of the surveyors and damage experts who have attended the vessel are in other countries or outside of Florida. Finally, it is noted that M&F can enforce its judgment in New Zealand.

Assessment

[35]              It is not possible to be definitive about the witnesses needed for trial. But, as Mr Blanchard QC properly conceded, it is not for one party to dictate to the other party what the witness list should look like. M&F’s list of witnesses is certainly comprehensive, but not unrealistic, having regard to M&F’s pleadings and AETM’s account, which bring into consideration the full circumstances of the collision. That list includes nine witnesses from the US (three from California, three from unknown states, one from Florida, one from Texas, and one from Arizona); multiple witnesses from American Samoa; a witness from Portugal; and a witness from Ecuador. While AETM disclaims the need to call a large number of witnesses (though it includes two surveyors from New Zealand), the majority of the witnesses likely to give evidence appear to reside or are based in either the US, Europe, or American Samoa.12

[36]              The two US-based investigations into the collision, together with the Koorale’s special Jones Act repair requirements, emphasise the American flavour of the proceedings. It also raises the prospect that the same witnesses involved in the US- based investigations will be required to give evidence in the present case. Mr Marten put it well in submissions when he said that “it would be unusual for a collision that was investigated as a matter of criminal/regulatory law by the flag state authority of

12 See Affidavit of Anthony David Ferreira In Support (dated 18 December 2019) at [16]-[20]; and Affidavit of Anthony David Ferreira In Reply (dated 10 Feb 2020) at [12].

both vessels, in the vessel’s home port, to then be subject of substantive civil proceedings in a third country that had no connection to the events”. Intuitively, it makes sense to hold the trial in the US, with its evidently closer connection to the parties and most of the witnesses.

[37]              Mr Blanchard submitted, however, that more than mere intuition is needed, because M&F carries the burden of proof to persuade the Court to exercise its discretion to stay. He also submits that I should examine the convenience issue at a state level, rather than by reference to the US as a whole. He said when examined at the US level, the amount of travel needed, and associated cost and inconvenience, is broadly the same, even between New Zealand and Florida.

[38]              Dealing first with burden, as noted above, M&F carries the persuasive burden on the ultimate issue. However, as Lord Goff said:13

It is however of importance to remember that each party will seek to establish the existence of certain matters which will assist in persuading the Court to exercise its discretion in its favour, and that in respect of any such matter the evidential burden will rest on the party who asserts its existence.

[39]              In the present case, I am satisfied that M&F has done enough to show that in a case involving two American companies; two American boats, both flying the US flag, with crew largely based in the US and/or American Samoa, with masters hailing from Texas (American Eagle), Arizona (Koorale), and Portugal; and only two witnesses likely to be required from New Zealand, the American jurisdiction has a much closer connection to the dispute and it would be more convenient to hear the collision dispute in America. This includes Florida. It was not necessary to produce an itemised breakdown of travel and other costs. New Zealand’s actual and renowned isolation is a matter amenable to judicial notice.

[40]              Moreover, while AETM did not need to produce evidence quantifying relative cost (including time and expense), it had to do more than simply invite me to arrive at a counterintuitive conclusion about the convenience of litigation between US-based companies in New Zealand. For completeness, I accept the fact the boats operate in

13     Spiliada Maritime Corp v Cansulex Ltd, above n 1, at 476.

the Pacific might favour New Zealand insofar as key witnesses might, at various times, find it more convenient to fly into New Zealand from one of the Pacific Islands. But that potential fortuity, in itself, is a weak basis for settling the issue of forum conveniens.

Applicable law

[41]              The in rem proceedings are subject to the admiralty jurisdiction of the High Court and the LLMC. But M&F submits that, contrary to obiter observations made by Salmon J in Fournier,14 jurisdiction is not determinative of the applicable law and does no more than place the burden on the defendant to establish a more appropriate forum. Rather, it is submitted that both parties’ home jurisdictions should apply, referring to The Eagle Point, a decision of the US Court of Appeals for the Third Circuit, wherein the law of the flag was applied to a case involving a collision between two British ships on the high seas.15

[42]              M&F also contends that the collision claim is a negligence claim subject to the Private International Law (Choice of Law in Tort) Act 2017 (PILA), the purpose of which is to establish rules for choosing the law to be used for determining issues relating to tort. Section 9 of the PILA is then said to displace the general rule that the law of the country where the tort took place applies if, in all the circumstances of the case, it is substantially more appropriate for the law of another country to apply. This analysis can only credibly point to US maritime law, given the parties are both US foreign nationals.

[43]              M&F further submits that the customs of the American South Pacific Tuna Fleet (the Fleet) also apply, as mandated by Rule 2 of the COLREGS (enacted into US federal law), which stipulates that nothing in the rules exonerates the owner, or master, or crew, from the consequences of any neglect to comply with these rules; or of the neglect of any precaution which may be required by the ordinary practice of seamen; or by the special circumstances of the case.

14     Fournier v The Ship "Margaret Z" [1997] 1 NZLR 629 (HC) at 19-21.

15     The Eagle Point 142 Fed 453 (1906) (3rd Circuit).

[44]            AETM responds that the law of forum has always traditionally been applied in collision cases, not the law of the flag of the vessel. The law of forum draws on a wide range of often common international sources. The MTA is also said to be at the core of the proceedings, which incorporates the LLMC and its further amendments within schs 8 and 9 respectively. Furthermore, the COLREGS (with amendments referred to in the second edition, issued by the International Maritime Organisation, 1990, as amended by resolution A. 736 (1) of 1993) is declared to be a convention for the purposes of the MTA and is thereby applicable in New Zealand. They are also reflected in Part 22 of the New Zealand Maritime Rules,16 which, broadly speaking, deal with – steering and sailing; lights and shapes; sound and light signals; and other types of vessels. Within this context, AETM maintains that New Zealand law is the applicable law, not the PILA, which does not logically apply given that it relates to torts or causes of action that occur within a country or countries. Moreover, whatever the position on the applicable law, the legal issues are straight forward, and so this factor should carry little weight.

Assessment

[45]              As explained by Mr Blanchard, the starting point is that jurisdiction is as of right, and the MTA is directly engaged. The MTA incorporates international conventions into municipal law – the COLREGS (through pt 4 and the Maritime Rules Part 22); the LLMC, and the LLMC Protocol of 1996 (through pt 7, ss 84-84A of the MTA). As I will now explain in more detail, if the matter is heard in New Zealand, this sets the frame for resolution of the collision proceedings to the extent that those conventions are relevant.

The frame

[46]              The assumption of jurisdiction in high seas disputes is longstanding. The in rem and corresponding arrest procedures have always been inextricably linked to securing compliance with judgment if and when obtained. As Lord Denning MR explained in The Banco: 17

16     Through pt 4 of the MTA.

17     The Banco [1971] 1 All ER 524 at 531 (CA); also cited by Williams J Bank of Narodka v The Ship "Abruka" (1996) 10 PRNZ 219 (HC) at 222.

Long years ago, in the seventeenth and eighteenth centuries, the ordinary mode of commencing a suit in Admiralty was by arrest, either of the person of the defendant or of his goods. Not only could the offending ship be arrested, but the other ships of the defendant could be arrested also, and any other goods that belonged to him, so long as they were within the jurisdiction. The object was to make the defendant put up bail or provide a fund for securing compliance with the judgment, if and when it was obtained against him:

…

If the defendant enters an appearance, the action in rem proceeds just as an action in personam. If judgment is entered against the defendant, it can be executed against any of his property within the jurisdiction, be it his other ships or any other goods. A writ of fieri facias, or other writ of execution, can be issued against his property, but only after judgment has been obtained […] If no appearance is entered, however, the action remains, as it began, an action in rem only, operating only against the ship arrested. If judgment is entered in default of appearance, it can be enforced by sale of the ship, but not against the defendant personally.

[47]              In New Zealand, high seas disputes are governed by the Admiralty Act 1973, which relevantly states at s 4:

The Court shall have jurisdiction in respect of the following questions or claims:

...

(e)any claim for damage by a ship.

[48]              Section 5 of the Admiralty Act also provides that in any case (such as the present) where there is a maritime lien,18 the admiralty jurisdiction of the High Court may be invoked for an action in rem against that ship.

[49]              As noted, international convention as it relates to the high seas is incorporated into our municipal law by the MTA. More specifically, s 83 under pt 7 of the MTA states:

This part applies to every ship (whether registered or not and whether a New Zealand ship or not) in any circumstances in which the High Court has jurisdiction under section 4 of the Admiralty Act 1973.

18     Admiralty Act 1973, s 2 – maritime lien includes a lien in respect of damage.

[50]              Section 86(3)(d) states that the LLMC (as amended by the LLMC Protocol) applies whether the liability arises at common law or under any other enactment, and notwithstanding any other enactment.

[51]              Part 8 also generally provides for liability where two or more ships are involved, and provides for division of loss, damages for personal injury, rights of contribution, and limitation of actions.

[52]              Section 92 under pt 8 of the MTA repeats the same words as s 83, as provided above.

[53]              The incorporation of international conventions into municipal law reflects the broader commitment of Parliament and common law tradition to the enforcing of international maritime rules. As Keith J stated in Sellers v Maritime Safety Inspector:19

In the Maritime Transport Act itself, Parliament recognises the primacy or at least the central significance of international law. According to its title it is an Act:

(b) to enable the implementation of New Zealand’s obligations  under international maritime agreements …

The second of the principal functions of the Ministry of Transport under the Act is

(b)to ensure New Zealand’s obligations under the Conventions  are implemented and to administer New Zealand’s participation in them […]

[54]Keith J also had this to say about the common law tradition:20

New Zealand Courts have for over a century made it plain that legislation regulating maritime matters should be read in context of the international law of the sea and if possible consistently with that law.

[55]              Accordingly, the statutory integration of the admiralty jurisdiction, maritime regulation, and international convention, makes abundantly clear that the law to be applied in the collision proceedings must be consistent with international law, including the LLMC and the COLREGS, as interpreted and applied by this Court. A

19     Sellers v Maritime Safety Inspector [1999] 2 NZLR 44 (CA) per Keith J at 57.

20     At 56-57.

recent example of the application of the LLMC to a damages claim, though not on the high seas, can be found in Daina Shipping.21

[56]              Given this starting point, I am satisfied that, if the collision dispute is tried in New Zealand, the law of New Zealand is the applicable law in relation to high seas disputes. Salmon J in Fournier adopted a stronger position. He said:22

As to the law governing the transaction, it is clear that in respect of in rem claims in admiralty, lex fori resolves all issues, including priorities. Thus New Zealand law is applicable. In the case of an action in rem, the natural forum is arguably where the ship is situated. That is after all the whole point of the jurisdiction.

[57]              It is also the longstanding approach of the English courts to resolve high seas disputes by reference to the traditions and principles adopted as English maritime law.23 Lord Goff’s observation in Spiliada that he could see no reason why an English court would stay proceedings about a high seas collision exemplifies this reasoning.24 As Brett LJ put it in Chartered Mercantile Bank of India:25

From time immemorial, as far as I know, such actions have been maintained in the Court of Admiralty, and the rule of liability of the shipowner for the acts of his servants has been invariably employed, and in as much as the rule of exclusive jurisdiction cannot apply, it seems to me that if a foreigner in this country can be served with a writ for an act of his servants done on the high seas, which are as much within the jurisdiction of England as they are within the jurisdiction of any country, an action can be maintained in a Court of common law.

[58]              But I would not go so far as to say, “in rem” jurisdiction per se is determinative of the “natural” forum in every case. As Lord Wilberforce put it in The Atlantic Star:26

The Act thus establishes beyond question the Court’s jurisdiction, i.e. the power to try the suit. In my opinion it does no more. It does not oblige the Court to proceed with any case: it does not affect any matter of procedure, nor

21 Daina Shipping Company v Ngāti Awa [2013] 2 NZLR 799 (HC).

22 Fournier v The Ship "Margaret Z", above n 14, at 20 – I note this approach also accords with the position adopted in the United Kingdom.

23 See Brett LJ’s comments in Chartered Mercantile Bank of India v Netherlands India Steam Navigation Company (1883) 10 QBD 521 and The Gaetano and Maria (1882) 7 PD 137, as discussed in C F Finlayson “Shipboard Torts and the Conflict of Laws” (1986) 16 VUWLR 119, at 136.

24 Spiliada Maritime Corp v Cansulex Ltd, above n 1, at 477.

25 Chartered Mercantile Bank of India v Netherlands India Steam Navigation Company, above n 21, at 537.

26 The Atlantic Star [1973] 2 Lloyds Rep 197 (HL) – I note the COLREGS did not form part of the law of the England at the time of this statement.

in terms or by implication affect the Court’s power, inherent or statutory, to stay proceedings.

[59]              There is also some force to the submission that where the foreign vessels carry the same flag, the law of the flag should apply to the action, as occurred in The Eagle Point.27 That would appear reasonable where, as here, the COLREGS applied.

Application

[60]              On the material before me, however, the point is largely moot. It was for M&F to prove that the law of the flag is relevant and materially different from the law of forum.28 But, with respect to the otherwise helpful submissions on behalf of M&F, cursory attention only was given to this. Brief mention was made of the potential for punitive damages, a separate cause of action against ship management based on privity, the law of causation, the “totality of US tort law” and the potential for applying US regulation. I am in no position to evaluate the potential implications of this very broad subject matter. In this regard, only r 2 of the COLREGS was cited to me as having potentially direct relevance to the action in the present case insofar as it required consideration of the customs of the Fleet.29 That, however, appears to be an uncontroversial proposition because it seems common ground that the custom is relevant to the assessment of fault,30 a matter this Court is well able to take into account, with the benefit of expert evidence.

[61]              Furthermore, as Mr Blanchard submitted, New Zealand, like American Samoa and Florida, applies the COLREGS. The engagement of the Jones Act might be relevant to the assessment of quantum damages given the special repair requirements needed to maintain status under that Act. But that factor is another matter that can be readily considered by a New Zealand court. While undoubtedly there will be other differences between the law of the flag and the maritime law of New Zealand, those differences and their materiality to the collision proceedings were not made known to me.

27     See discussion in C F Finlayson “Shipboard Torts and the Conflict of Laws”, above n 23, at 138.

28     The “Al Khattiya” [2018] EWHC 389 (admlty) at [67].

29     US regulations dealing with collisions might also be indirectly relevant, though how remains unclear to me.

30 See Affidavit of Larry Da Rosa in Support of Notice of Opposition (dated 30 January 2020) at [32].

[62]              In the result, the law of the flag, as it relates to high seas collisions, is not obviously materially different from New Zealand law, and New Zealand law is not obviously materially disadvantageous to M&F, save in respect of the limitation issue, the relevance of which I address below. I am satisfied, therefore, that the law of New Zealand is the applicable law in this case. Further, if I am wrong about that, the applicable law is, at most, a neutral point in the forum conveniens calculus.

[63]              Before turning to the relevance of limitation, I must address the relevance of the PILA. For this purpose, I interpret the provisions of the PILA in accordance with the text used in light of its purpose and context.31 As noted by Keith J in Sellars, maritime legislation should be read in context of, and consistently with (if possible), the international law of the sea.32

[64]              I am satisfied that the PILA has no application in cases of high seas collisions. I accept the purpose of the PILA is broad, namely, to establish rules for choosing the law to be used for determining issues relating to tort.33 The scheme, with its wide scope, reflects this broad purpose. In this regard, s 7(2) of the PILA identifies the following principle:

The applicable law is to be used for determining the issues arising in a claim that have been characterised as relating to tort, including the question of whether an actionable tort has occurred.

[65]Section 8(1) states:

The general rule is that the applicable law is the law of the country in which the events constituting the tort in question occur.

[66]              Section 8(2) addresses circumstances where the elements of the events constituting the tort occur in different countries. It states:

Where the elements of those events occur in different countries, the applicable law under the general rule is,–

31     Interpretation Act 1999, s 5; Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [24].

32     Sellers v Maritime Safety Inspector, above n 19.

33     Private International Law (Choice of Law in Tort) Act 2017, s 3.

(a)For a cause of action in respect of personal injury caused to an individual or death arising from personal injury, the law of the country where the individual was when he or she sustained the injury;

(b)for a cause of action in respect of damage to property, the law of the country where the property was when it was damaged; and

(c)in any other case, the law of the country in which the most significant element or elements of those events occurred.

[67]Section 9(1) then states:

The general rule is displaced if the court determines in accordance with subsection (2) that in all the circumstances it is substantially more appropriate for the law of another country (country B) to be the applicable law.

[68]              But, while broad in purpose and scope, it is clear that under the PILA the applicable law will be determined by the general rule, which presupposes the tort occurred in a “country”, or that the elements of the cause of action occurred in a “country”. This general rule can then only be displaced pursuant to s 9 if the law of “another country” is substantially more appropriate. While the scope of s 9 literally appears to include high seas torts, when read in this context, it only applies if and when the law of another country is substantially more appropriate than the law of the country where the tort, or the elements of the cause of action, occurred. In addition, given the ancient character of the law of admiralty, and the clear legislative policy mentioned above, if Parliament had intended to include torts on the high seas within the reach of the PILA, it would have done so expressly.

Relevance of limitation

[69]              The LLMC, as amended by the LLMC Protocol of 1996, imposes a limitation on liability for damage. As Mr Marten explained in his submissions, New Zealand’s and the US’ respective limitation regimes work in different ways, the former being based on the LLMC and the latter being based on market value of the vessel and its freight (as the US has not adopted the LLMC). The effect of this on the present case is that, if the collision proceedings are heard in New Zealand, the liability of the boat owners will be capped at about US$2m. This compares to the Koorale’s estimate of likely damage and loss which they claim to be over US$10m. On its face, the limitation is prejudicial to M&F. Mr Ferreira also provides evidence that half of

M&F’s claims are entirely uninsured, noting his anticipation as well that M&F cannot continue as a going concern if it cannot recover its losses.34

[70]              Mr Blanchard submits the law is settled – the difference in the applicable limitation amount in the different regimes is irrelevant. Herceg, a decision of the English Court of Appeal, is cited as authority.35

[71]In that case, the Court said:36

But in terms of abstract justice, neither convention is objectively more just than the other. Our task is not to decide whether our law is better than the law of Singapore. It is to decide whether substantial justice will be done in Singapore.

[72]              Mr Martyn accepts that limitation is generally a neutral factor, but submits it is, nevertheless, relevant to the question of whether “substantial justice can be done in the other jurisdiction”, in a situation where both parties are from the same jurisdiction.

Assessment

[73]              As the English Court of Appeal in Herceg observed, limitation is not a reason to grant or decline a stay. The key issue is whether substantial justice will be done.37  I accept that there are three curious features of this case that appear to bear on the issue of substantial justice. First, both ships are US flagged vessels. Second, the US is not a signatory to the LLMC or the 1996 Protocol. Third, AETM (as claimant) and M&F (as potential claimant) may both be juridically disadvantaged by the limitation. At first blush, it appears “substantial justice” will be best achieved by referring the proceedings to a US court where the limitation does not apply, so that the actual loss caused can be remedied. But, as M&F properly concede, the common law regards limitation regimes as procedural rather than substantive in nature and thus the law of forum will apply.38 To borrow the reasoning of the Court in Herceg about the significance of the limitation, it is quite impossible to say that substantial justice is not available in New Zealand, seeing that there is significant agreement among civilised

34 See Affidavit of Anthony David Ferreira in Reply (dated 10 February 2020) at [19].

35     Herceg Novi v Ming Galaxy [1998] 2 Lloyd’s Rep 454.

36     See concluding points at (3).

37     Spiliada Maritime Corp v Cansulex Ltd, above n 1, at 482.

38     Citing Caltex Singapore Pte Ltd v BP Shipping Ltd [1996] 1 Lloyds Rep 286 (QB) at 291-296.

nations with the law as it is administered here. I therefore consider limitation to be a neutral factor.

Enforceability and security

[74]              Enforceability  and  security  were  also   identified   as   relevant   matters. Mr Blanchard submits that, if found liable, M&F would be able to enforce a New Zealand judgment against any fund which they have offered to provide by way of a P&I club letter of undertaking in the limitation proceedings. M&F, however, complains that the establishment of a limitation fund here is of no real comfort because, given the limitation, it “would be tantamount to acceptance of the end of M&F Fishing’s business”. It also says that American Eagle has defeated M&F’s ability to gain security in American Samoa because it avoided service there. By contrast, it says that there is no issue of security in Florida. It also says that it will offer an undertaking as to security if required.

Assessment

[75]              I consider the issue of enforcement and security to be a neutral point. M&F’s complaint about limitation relitigates the limitation issue which I have addressed above. The ability to enforce is available in both jurisdictions and M&F’s offer to provide an undertaking addresses any residual concern about security in the event that proceedings are dealt with in Florida.

Overall – Stage 1

[76]As Lord Goff said in Spiliada:39

It seems to me inevitable that the question… must be at bottom… to identify the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice

[77]              The dispute is more closely connected to an American jurisdiction. This case is about two American boats whose witnesses are primarily located in either American Samoa, the US, or Europe, and whose business interests are located in either American

39     Spiliada Maritime Corp v Cansulex Ltd, above n 1, at 480. See also The “Al Khattiya”, above n 28, at 52.

Samoa, or the US. They are also facing investigation in the US and have no substantial connection to New Zealand, other than the fact the Koorale and some of AETM’s boats came here for repairs. While, traditionally, the common law courts will not stay proceedings simply because foreign nationals are involved, there are numerous cases on the books where the courts have stayed proceedings where the connection to the forum is, as here, demonstrably weak.40 Moreover, I can see a clear advantage in terms of convenience to both boat owners in having this matter heard in Florida, where TM is based, while I can see no material disadvantage to either AE or TM in having the matter heard in Florida.

[78]              I also consider it is important to keep in mind the principle that the Court does not lightly exercise jurisdiction over foreign parties.41 While this is not a case of extraterritorial application of domestic law simpliciter, it is a case involving two foreign nationals, from the same country, whose acts on the high seas would normally be a matter for the jurisdiction of that country only.42

[79]Overall, therefore, I am satisfied that Florida is a more appropriate forum.

Stage 2

[80]              AETM properly, in my view, considers there are no stage 2 factors in this case given limitation of liability is irrelevant.

Outcome of Spiliada analysis

[81]Florida is forum conveniens. The in rem proceedings are therefore stayed.

The limitation proceedings

[82]              The limitation proceedings are now futile and are therefore stayed. Had it been necessary to decide the point, M&F accepts if I did not find in its favour on the in rem proceedings, I could not have found for them in relation to the limitation proceedings.

40     See discussion and cases cited in The “Al Khattiya”, above n 26, at 43; and Spiliada Maritime Corp v Cansulex Ltd, above n 1, at 480.

41     As discussed in Wing Hung Printing Company Ltd v Saito Offshore Pty Ltd, above n 2, at [28].

42     Sellers v Maritime Safety Inspector, above n 19, at 46.

Result

[83]              Florida is forum conveniens. The proceedings will be stayed on provision of an undertaking as to security. If the terms of that undertaking cannot be agreed, then the parties may seek the assistance of the Court.

[84]The applicant is entitled to costs and disbursements on a 2B basis.

Solicitors:           Lowndes Jordan, Auckland

Izard Weston Lawyers, Wellington