FEDERAL COURT OF AUSTRALIA

 

2001 FCA 1537

 

Graham Bailey Pty Limited v The Owners of MV Beadon


GRAHAM BAILEY PTY LIMITED v THE OWNERS OF MV BEADON

 

D19 of 2000



MANSFIELD J

19 OCTOBER 2001



IN THE FEDERAL COURT OF AUSTRALIA

 

NORTHERN TERRITORY DISTRICT REGISTRY

D19 OF 2000

 

BETWEEN:

GRAHAM BAILEY PTY LTD trading as FREMANTLE OIL DISTRIBUTORS

APPLICANT

 

AND:

THE OWNERS OF MV BEADON

RESPONDENT

 

JUDGE:

JUSTICE MANSFIELD

DATE OF ORDER:

19 OCTOBER 2001

WHERE MADE:

ADELAIDE

 

THE COURT ORDERS THAT:

 

1.                  The caveat against release from arrest of ship or other property be set aside, in particular in respect of the proceeds of sale of the motor vessel MV Beadon lodged by Alan John Fraser by facsimile to the Court on 3 August 2001.

2.                  The proceeds of sale of the MV Beadon presently held in the account in the name of the Marshal in accordance with the order of the Court made on 23 May 2001, be applied in the following amounts:

(i)                  $9796.20 to be paid to Graham Bailey Pty Ltd trading as Fremantle Oil Distributors in reimbursement of moneys paid by Graham Bailey Pty Ltd trading as Fremantle Oil Distributors  to the Marshal pursuant to undertakings given to secure the warrant of arrest of the vessel and in relation to its arrest and associated with its sale.

(ii)                The balance of the proceeds of sale presently held be paid to Graham Bailey Pty Ltd trading as Fremantle Oil Distributors on account of its other costs and disbursements associated with the procuring of the arrest of the vessel and its sale.



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


IN THE FEDERAL COURT OF AUSTRALIA

 

NORTHERN TERRITORY DISTRICT REGISTRY

D19 OF 2000

 

BETWEEN:

GRAHAM BAILEY PTY LTD trading as FREMANTLE OIL DISTRIBUTORS

APPLICANT

 

AND:

THE OWNERS OF MV BEADON

RESPONDENT

 

 

JUDGE:

JUSTICE MANSFIELD

DATE:

19 OCTOBER 2001

PLACE:

ADELAIDE


REASONS FOR JUDGMENT


1                     On 25 January 2001 the vessel MV Beadon was arrested pursuant to a warrant for arrest issued on 22 December 2000.  On 17 April 2001 the Court gave directions for the sale of that vessel.  At the same time the Court gave judgment for the plaintiff, which had sought the arrest warrant, in the sum of $13,953.07 plus costs against Western Horizons Pty Limited (Western Horizons).  Western Horizons went into liquidation the following day, that is 18 April 2001.

2                     The sale proceeded in accordance with the directions.  On 4 July 2001, the Court directed that the Marshal accept the highest tender for the vessel, namely $16,500.  The sale was settled on 12 July 2001, and payment of the sale price made on that date.  The Court then authorised payment from the sale of proceeds of $5762.34 paid by the Marshal in relation to the sale of the vessel, leaving a balance of $10,737.66.  That sum was paid into an account which has accrued interest from time to time to the present time.

3                     In the meantime, on 25 May 2001 the Court gave directions that any claim in respect of the proceeds of sale of the vessel should be notified.  It fixed today for the hearing of any such claims.  There are two claims which the Court needs to address:  the first is by the plaintiff for the judgment sum and the costs associated with procuring the arrest and sale of the vessel.  The second is by Alan John Fraser (Mr Fraser).

4                     Pursuant to undertakings given to secure the arrest warrant and then the sale of the vessel the plaintiff has paid to the Marshal (in addition to the expenses the Marshal has paid directly to date) the sum of $9796.20.  The plaintiff has also made claims for its costs and disbursements of $13,902.16, plus outstanding and unbilled costs estimated at $1750; and the costs of solicitors engaged in Western Australia of $6381.64.  The amount involved for costs is a little over $20,000.

5                     I am satisfied that the plaintiff has incurred significant costs and disbursements in procuring the arrest of the vessel and in relation to its sale.  It is not necessary for me in the circumstances to determine that the particular amount for costs as claimed is an appropriate amount, simply because in the light of the moneys presently available from the sale of the vessel there will only be a relatively small sum left over after payment of the plaintiff's disbursements to the Marshal of $9796.20.  On my calculations it is $941.46 plus any interest accrued on that account.  That surplus is a sum which, having regard to its amount, would clearly be much less than the proper costs of the plaintiff in procuring the arrest warrant and in relation to the sale of the vessel.

6                     The other claim is by Mr Fraser, a director of Western Horizons.  He claims as a secured creditor of Western Horizons a sum said to be not less than $165,000.  Although the documentation before the Court is not complete, I am satisfied that in 1994 and 1995 Western Horizons gave to the Commonwealth Development Bank of Australia an equitable mortgage over the assets and undertaking of Western Horizons, and gave to the Commonwealth Development Bank of Australia a mortgage of the chattels on The Beadon.  Those two security instruments were assigned to the Commonwealth Bank of Australia by instrument on 28 October 1996.  I am also satisfied that on 8 October 1996 Western Horizons granted to Commonwealth Bank of Australia an equitable mortgage over its assets and undertaking and separately a bill of sale over the motor vessel The Beadon on the same date.  I am further satisfied that the Commonwealth Bank of Australia, then holding those four securities, assigned them to Mr Fraser by an instrument undated but duly stamped on 17 May 2001, so that he properly claims to be the holder of those securities.  I am also prepared to assume - although the evidence is relatively slender in this regard - that there is a significant amount outstanding in respect of those securities, which Mr Fraser has reimbursed to the bank because he was a surety in respect of Western Horizons' indebtedness to the Commonwealth Bank of Australia, and is therefore entitled to claim a substantial sum.  I do not need to determine whether it is, as he claims, in the order of or not less than $165,000.

7                     For the purposes of fixing the priority of payments I propose to follow the decision of Sheppard J in Patrick Stevedores (No.2) Pty Limited v The Proceeds of Sale of the Vessel MV Skulptor Konenkov (1997) 75 FCR 47 in particular at 50.  I have heard no submissions which persuade me that I should adopt some other framework of priorities in the present circumstances.

8                     In those circumstances and in the light of the findings I have made as to the amounts involved I make the following orders:


(1)        I set aside the caveat against release from arrest of ship or other property, in particular in respect of the proceeds of sale of the motor vessel MV Beadon lodged by Alan John Fraser by facsimile to the Court on 3 August 2001. 


(2)        I order that the proceeds of sale of MV Beadon presently held in the account in the name of the Marshal in accordance with the order of the Court, be applied in the following amounts:


            (i)         $9796.20 be paid to the plaintiff in reimbursement of moneys paid by the plaintiff to the Marshal pursuant to undertakings given to secure the warrant of arrest of the vessel and in relation to its arrest and associated with its sale;


            (ii)        The balance of the proceeds of sale presently held be paid to the plaintiff on account of its other costs and disbursements associated with the procuring of the arrest of the vessel and its sale.


9                     As I have indicated that amount is likely to be only a relatively small amount and considerably less than the proper costs of the plaintiff in relation to those matters.  Accordingly although I accept the claim of Mr Fraser to be the assignee of the Commonwealth Bank of Australia in respect of the indebtedness of Western Horizons, there will clearly be no additional funds available to meet his claim.  The adoption of the priorities to which I have referred in accordance with that authority means that it is not necessary to make any further order with respect to the application of those funds.


I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.



Associate:


Dated:              19 October 2001



Counsel for the Applicant:

Ms J. Presbury



Solicitor for the Applicant:

Messrs Cridlands



Alan John Fraser:

In Person



Date of Hearing:

Friday, 19 October 2001



Date of Judgment:

Friday, 19 October 2001