CATCHWORDS

 

 

 

 

 

SHIPPING AND NAVIGATION - admiralty jurisdiction - "claim for damage done to a ship" - whether that expression is wide enough to encompass claims on policies of insurance that indemnify ship owners against damage to their ship

 

 

 

 

 

Admiralty Act 1988 (Cth) - ss 4(2)(a), 4(2)(b), 9(1), 9(1)(b)

 

 

 

 

 

Cases Considered

 

De Lovio v Boit 7 Fed Cas 418 (1815)

Owners of the ship "Shin Kobe Maru" v Empire Shipping Company Inc (1994) 181 CLR 404

Sailing Ship "Blairmore" Company Ltd v Macredie [1898] AC 593

The Eschersheim [1976] 1 All ER 920

 

 

 

 

Sandford Pty Ltd

v NZI Insurance Limited & Anor

QG 183 of 1995

 

 

 

 

 

Drummond J

Brisbane

22 April 1996

IN THE FEDERAL COURT OF AUSTRALIA)    No. QG 183 of 1995

QUEENSLAND DISTRICT REGISTRY      )

GENERAL DIVISION                  )

 

 

 

          BETWEEN:  SANDFORD PTY LTD

 

                                      Applicant

 

          AND:      NZI INSURANCE LIMITED

 

                                      First Respondent

 

          AND:      LUMLEY GENERAL INSURANCE LIMITED

 

                                      Second Respondent

 

 

 

 

                      MINUTES OF ORDERS

 

 

JUDGE MAKING ORDER:          Drummond J

DATE OF ORDER:               22 April 1996

WHERE MADE:                  Brisbane

 

 

 

THE COURT RULES THAT:

 

 

1.        The Federal Court has jurisdiction under s. 9(1)(b) the Admiralty Act 1988 (Cth) to determine this action on a policy of marine insurance to recover damages for the insurer's failure to indemnify the insured against losses arising from damage suffered by the insured vessel.

 

 

 

 

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

IN THE FEDERAL COURT OF AUSTRALIA)    No. QG 183 of 1995

QUEENSLAND DISTRICT REGISTRY      )

GENERAL DIVISION                  )

 

 

 

          BETWEEN:  SANDFORD PTY LTD

 

                                      Applicant

 

          AND:      NZI INSURANCE LIMITED

 

                                      First Respondent

 

          AND:      LUMLEY GENERAL INSURANCE LIMITED

 

                                      Second Respondent

 

 

 

 

 

Coram:    Drummond J

Date:     22 April 1996

Place:    Brisbane

 

 

 

                    REASONS FOR JUDGMENT

 

 

          The question for determination is whether this Court has jurisdiction to deal with an action that arises out of a claim by an insured owner on a policy of marine insurance on a vessel.  The insured vessel capsized, the owner incurred costs of salvage, towage and of repairing the vessel.  The insurer has refused to indemnify the owner in respect of any of these losses.  The owner alleges this is a breach of the contract of insurance.  The answer to the question of jurisdiction depends on whether this claim by the owner against the insurer comes within s. 9(1)(b) the Admiralty Act 1988 (Cth), i.e., on whether the present proceedings are an action on a claim for damage done to a ship. 

          It would, I think, be difficult to say that such a claim by an insured ship owner is itself a claim for damage done to a ship within the ordinary meaning of that phrase.  But that is not to the point.  The phrase "a claim for damage done to a ship" has to be read in the context of s. 9(1), which confers jurisdiction:

 

          "... in respect of proceedings commenced as actions in personam ... on a claim for damage done to a ship."

 

          The phrase in this context is directed to identifying the kind of actions which this Court is given jurisdiction to determine.

 

          The Law Reform Commission, in paragraph 124 of its report number 33 on Civil Admiralty Jurisdiction, accepted Lord Diplock's reasoning in The Eschersheim [1976] 1 All E.R. 920 at 927‑928 as showing why it was not appropriate to treat admiralty jurisdiction in rem as extending to a claim for damage done to, or received by, a ship.  However, in paragraph 172 of the report the Commission favoured the conferral of in personam jurisdiction in respect of claims by the owners of ships that had suffered damage.  The Commission said:

 

          "But there are good reasons for including such a head of jurisdiction in admiralty [i.e., damage done to a ship] so as to allow actions in personam.  For example, a collision between a ship and some object other than a ship may well give rise to a dispute as to liability.  The shipowner's claim or counter claim for damage to the ship should be within admiralty jurisdiction just as much as the claim by
the owner of the other object involved.  Accordingly, in personam admiralty jurisdiction with respect to claims for damage done to a ship should be conferred in the proposed legislation."

 

          The Commission's views were, I think, clearly accepted by the Parliament in enacting the Admiralty Act 1988 (Cth), as is evidenced by s. 9(1)(b).

 

          The preposition "for" is well capable in ordinary usage of conveying, in an appropriate context, the meaning "in respect of" or "with regard to".  See, for example, the Macquarie Dictionary.  I therefore think the expression in s. 9(1)(b) in its ordinary meaning is wide enough to extend to claims on policies of insurance that indemnify ship owners against damage to their ship, at least where, as it is alleged here, the damage was caused by perils of the sea.

 

          It does not, in my opinion, matter that in England, claims on policies of marine insurance as a genus are not regarded as within the jurisdiction in admiralty, a point made in the Sailing Ship "Blairmore" Company Ltd. v Macredie [1898] A.C. 593 at 606.  In Owners of the ship "Shin Kobe Maru" v Empire Shipping Company Inc. (1994) 181 C.L.R. 404, the question before the High Court was whether the provisions of s. 4(2)(a) and (b) the Admiralty Act 1988 (Cth), defining proprietary maritime claims as including claims relating to possession of a ship and title to, or ownership of, a ship and claims between co‑owners of a ship relating to the possession and ownership of a ship, encompassed a claim in which a party
to an action contended that a third party was entitled to ownership of a ship.

 

          The Court observed, at 418, that:

 

          "In their natural and ordinary meaning, the words `a claim ... relating to ... ownership' are wide enough to encompass a claim that a third party is or has been or is entitled to become the owner of the property in question."

 

          The Court continued, at 419:

 

          "It was argued for YSL that the expression `a claim ... relating to ... ownership' should be read down by reason of its statutory context and in light of the practice and general principles of Admiralty ...  The argument based on practice and general Admiralty principles proceeded largely on the basis that there is no reported case, or none that could be found, involving the exercise of jurisdiction in an action in rem where the plaintiff asserted not its ownership but that of a third party."

 

          In rejecting this argument the Court, at 420, said:

 

          "Nor is it possible to construe s. 4(2)(a) and (b) by reference to the practice and principles applied in Admiralty matters before the Act was passed.  As earlier indicated, the Act was intended to reform the law with respect to the Admiralty jurisdiction."

 

          The Court, at the same page, also observed, in giving its further reasons for rejecting the argument:

 

          "... a statutory definition should be approached on the basis that Parliament said what it meant and meant what it said.  The consequence of that is that a definition should be read down only if that is clearly required ..."

 

          The words of s. 9(1)(b), in their ordinary meaning, are apt to cover claims of the kind here in question.  These sort of claims have long been recognised as within the admiralty jurisdiction in the United States and Scotland.  See De Lovio v Boit 7 Fed. Cas. 418 (1815) and the Sailing Ship "Blairmore" Company Ltd. v Macredie, supra.  There is, in my opinion, therefore no novelty in accepting that they are within the sub-section.  There is no constitutional limitation on the power of the Parliament to enact a law conferring admiralty jurisdiction over such claims.  See Owners of the ship "Shin Kobe Maru" v Empire Shipping Company Inc., supra, at 423‑424.  There is no need to read down s. 9(1)(b) to exclude such claims because they are not regarded as being within the jurisdiction of the Admiralty Court in England.

 

          I will therefore rule that the Federal Court has jurisdiction under s. 9(1)(b) to determine this action on a policy of marine insurance to recover damages for the insurer's failure to indemnify the insured against losses arising from damage suffered by the insured vessel.

 

 

I certify that this and the preceding

four pages are a true copy of the

reasons for judgment herein of the

Honourable Justice Drummond.

 

 

Associate:

Date:         22 April 1996

Counsel for the applicant:            A. Philippides

 

Solicitors for the applicant:         Murrell Stephenson

 

 

 

Solicitors for the respondents:       Phillips Fox

 

 

 

Date of Hearing:                      22 April 1996