FEDERAL COURT OF AUSTRALIA

Metall Und Rohstoff Shipping v the Owners of Bunkers on Board the ship MV “Genco Leader” [2005] FCAFC 162

ADMIRALTY AND MARITIME – arrest – proper construction of s 17 of the Admiralty Act 1988 – no statutory authority to arrest bunkers owned by relevant person when those bunkers were not the property with which the relevant general maritime lien was concerned.

Admiralty Act 1988 (Cth)   ss 13 and 17

METALL UND ROHSTOFF SHIPPING AND HOLDINGS B.V. v THE OWNERS OF BUNKERS ON BOARD THE SHIP MV “GENCO LEADER”

NSD 1335 of 2005

LEE, TAMBERLIN & ALLSOP JJ

12 AUGUST 2005

SYDNEY AND VIDEO LINK TO PERTH

THE COURT ORDERS THAT:

1.               this notice of motion be heard instanter;

2.               the bunkers on board the MV “Genco Leader” be released from arrest;

3.               the arrest warrant for the arrest of the bunkers on board the MV “Genco Leader” issued on 4 August 2005 be set aside;

4.               the writ in rem be set aside;

5.               the plaintiffs pay the defendant’s costs of the motion to date; and

6.               the parties have liberty to apply on Monday 15 August 2005 or Tuesday 16 August 2005.

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

REASONS FOR JUDGMENT

LEE J

1                     I subscribe to the reasons enunciated by Allsop J.

Associate:

Dated:              22 August 2005

REASONS FOR JUDGMENT

TAMBERLIN J

2                     I also agree with the reasons of Allsop J.  In my view the language is clear and there is no basis to insert words such as "any" before the word "property" in 17(a).  That would require a modification of the language used, which on its normal and ordinary meaning means the ship or the property. 

3                     I am further conscious of the fact that the interpretation of the Act has international ramifications and in the absence of any indication that there has been a similar construction in any other jurisdiction, I would be wary of departing from the line of authority which has been referred to on this hearing.  For those reasons I agree.

Associate:

Dated:              22 August 2005

REASONS FOR JUDGMENT

ALLSOP J

4                     In this matter, earlier this week, on the application of the plaintiff, the bunkers on board the motor vessel “Genco Leader” were arrested by a Marshal of the Court. 

5                     “Genco Leader” is lying off Fremantle.  She is due to load a cargo of wheat commencing on Sunday, August 14.  She is due to complete her loading sometime thereafter, either on Monday or Tuesday, and she is likely to leave port either on Monday evening or Tuesday morning.

6                     The basis of the arrest of the bunkers was set out in the affidavit in support of the arrest and in the writ.  Briefly, there is a claim between the plaintiff and a company known as Maywal Limited (“Maywal”), being identified as the relevant person for the purposes of s 17 of the Admiralty Act, 1988 (Cth).  Maywal was a time charterer of the vessel “Tolmi”.  The other party to that time charter was the plaintiff.  There is an extant dispute between the plaintiff and Maywal about that time charter.  It is unnecessary to recount the detail of that dispute.  The dispute has been submitted to arbitrators in London and is in the process of disposition by those arbitrators.  Thus, the arrest of the bunkers is for the purposes of security for that arbitration, a course, all other things being equal, permitted by s 29 of the Admiralty Act.

7                     The relevant person, Maywal, has recently entered into a time charter with another company for the time charter of “Genco Leader”.  That charter was entered at the beginning of this month, August 2005.  There are bunkers on board the vessel, both in the form of the fuel oil and diesel for the vessel.

8                     By notice of motion filed on 10 August 2005, Maywal seeks to set aside the writ and the arrest.  The Chief Justice has given a direction that the jurisdiction to hear the relevant parts of the notice of motion contesting the authority of the Court to arrest the bunkers be heard by a Full Court.  Mr Hetherington, who appears for Maywal Limited, has identified in the notice of appearance that Maywal is said to be the owner of the intermediate fuel oil on board “Genco Leader”, but not the diesel.  The parties, after discussion in directions today, are agreed that the resolution of the issues concerning the intermediate fuel oil will deal with the diesel as part of the bunkers. 

9                     The parties have provided written submissions for which I am grateful, and I am sure I speak on behalf of the other members of the Court as well in this regard.  They will remain with the file and I do not propose to outline them at length given the urgency of the matter and the time.  There is also a helpful document entitled “Plaintiff's Construction of s 17” around which the argument took place. 

10                  Section 17 of the Admiralty Act provides:

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.

11                  In summary, the plaintiff says that there is a general maritime claim under s 4(3)(f) of the Admiralty Act concerning “Tolmi”.  That proposition is common ground.  There is a charterparty dispute being arbitrated in London concerning “Tolmi”.  It is between the plaintiff and the relevant person.  Thus, it is said in argument that the first part of s 17 of the Admiralty Act is satisfied.   

12                  The plaintiff's argument then is that in paragraphs (a) and (b) of s 17 the word "property" where it appears is not limited to the property referred to in the introductory part of s 17, that is in the phrase, "other property", and is not confined by reading the words in the introductory part of s 17 concerning a ship or other property.  To do so, it is said, would introduce an implied artificial restriction on the scope of s 17(a) and (b).

13                  The only limitation on the word "property" in subparagraphs (a) and (b) is said to be the notion of the jurisdictional limits of Admiralty and maritime jurisdiction contained within s 76(iii) of the Constitution and any other limits contained within section 76(ii) of the Constitution as brought in, it is said, by the terms of s 13 of the Admiralty Act. 

14                  It is said that ss 5, 13 and s 29 of the Admiralty Act should be seen as introducing a width to s 17 which is not to be read down, in accordance with the principles of construction identified in the Owners of the Ship “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 and other cases in the High Court in relation to the construction and interpretation of provisions conferring jurisdiction on courts.

15                  This construction gives a wide meaning to s 17, and this case is said to be an example of the operation of the wide construction.  It allows the arrest of any “maritime property” (that is property confined in its nature by s 13) that is owned by a relevant person as long as the introductory words of s 17 are satisfied.  That property need not be property concerned with or connected with the general maritime claim.  Here, the general maritime claim is the charterparty dispute arising out of the time charter of “Tolmi”.  Here, the property arrested has no connection with either the charterparty of “Tolmi” or the bunkers of “Tolmi”.  The property arrested is comprised of the bunkers in another ship which is owned by someone else which happens to have been time chartered by the relevant person after the dispute in relation to the earlier charterparty had arisen. 

16                  To construe s 17 in this way, would, in my view, lead to a width of s 17 which would in effect permit a form of maritime or Admiralty attachment of property of a debtor, limited only by the kind of considerations covered by s 13.  In my view, the argument should be rejected for a number of reasons.  First, in my view, the plain (and elegant, if I may say so) drafting of s 17 does not admit of any importance in the absence of the definite article before the word "property" in paragraph (a) or in paragraph (b).  As I said, the Act is simply drafted.  That is not a gratuitous comment.  It is important to understand the intended simplicity of the provision.  Section 17(a) can and should be read as meaning:  “the owner or [the] charterer of, or in possession or control of, the ship or [the] property”.  That is not to read words into, or put a gloss on, the section.  It is to understand what I think is the plain and literal meaning of the words.  The draftsperson has simply been economical and, if I may say so again, elegant, in the way the phrases were expressed.  To place emphasis on the absence of the definite article before the word “property” is to import the word “any” before it.

17                  Secondly, to create a limitation on property by reference to s 13 would introduce a difficulty in the operation of the Admiralty Act of the kind that was specifically rejected, being the width of Admiralty and maritime jurisdiction by reference to the historical development of the law:  see Australian Law Reform Commission Report No 33 (“ALRC Report”) para [194].  That was rejected in the way general maritime claims were identified and it should not be, and was not intended, in my view, to be, reintroduced at this point.  The connecting tissue, if I may use that expression, between property and Admiralty and maritime jurisdiction is the relationship between the property and the general maritime claim brought about by the words in the opening part of s 17. 

18                  Thirdly, the posited construction would introduce a notion of maritime or Admiralty attachment which I do not think was intended when one looks at and understands the historical background set out in the ALRC Report.  Against the background of the 1952 Arrest Convention and its compromise between the civilians and the common lawyers, the ALRC Report can be read as not intending to introduce into s 17 maritime attachment as to property (but not as to the ship in respect of which the connective tissue of a relationship with a general maritime claim is retained).

19                  In my view, the structure of Part 3 of the Admiralty Act is not to bring about this wide notion of attachment of property.  The property referred to in (a) and (b), in my view, is the property which has a connection with a general maritime claim as introduced by the first part of s 17.

20                  It is unnecessary to decide whether “property” includes bunkers.  For my part, I see no reason to limit the word “property” to particular types of property that would exclude bunkers.  The relevant limitation is, as I have said, found in the words "general maritime claim concerning" in the first part of s 17.  (See generally ALRC Report [107]-[110].)

21                  For those reasons, in my view, as a matter of construction, there was no statutory authority to arrest the bunkers and the orders sought in the notice of motion should be made.

22                  A stay is sought.  For my part, I am clear as to the construction of the statute.  The shipper has indicated some unwillingness to load the vessel should the arrest remain in place or if there is some concern as to that.  In my view, given that the ship is to load and it appears that she will be within the jurisdiction at least until Monday, the existence of these reasons and counsel and solicitors' note of them can be used as a basis of any application that any party wishes to make to the High Court. 

23                  In my view, given the clarity of the matter, I do not think the commercial deployment of this vessel should be interfered with by a stay of the orders.  The rights of the plaintiff to seek a stay are in effect protected by the practicality of the position, and if the plaintiff wishes to make an application for a stay to another court, it can do so.  However, the parties may have liberty to apply to this Court until Monday or Tuesday next week, if that may further protect the plaintiff's position.

Associate:

Dated:              22 August 2005