FEDERAL COURT OF AUSTRALIA

Brisbane Slipways Operations Pty Ltd v Pantaloni (No. 2) [2010] FCA 1055

THE COURT ORDERS THAT:

1.                  The plaintiff pay 65% of the costs of the first defendant of and incidental to the trial of the separate question the subject of Brisbane Slipways Operations Pty Ltd v Pantaloni [2010] FCA 654.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1                     On 24 June 2010, the Court made orders in disposition of the trial of the separate question in the proceedings of whether the action in rem commenced against the ship Aremiti 4 was within jurisdiction.  The first defendant, Mr Pantaloni, contended that the action in rem was beyond jurisdiction as, on the evidence, the plaintiff had failed to prove that Mr Pantaloni was either the owner or alternatively a demise charterer of the ship when the proceeding was commenced.  Mr Pantaloni contended that the plaintiff, on the affidavit evidence, had failed to demonstrate the jurisdictional requirements of ss 17 or 18 of the Admiralty Act 1988 (Cth). 

2                     Mr Pantaloni also contended that the plaintiff’s claim on the contract made with Mr Pantaloni was an action in personam which was not associated with any properly constituted in rem proceeding and it too fell away with the in rem claim. 

3                     The orders made on 24 June 2010 and the reasons for judgment in support of those orders are set out in Brisbane Slipways Operations Pty Ltd v Pantaloni [2010] FCA 654.  I do not propose to repeat in these reasons the substance of the orders or a synopsis of the content of the earlier reasons.  The earlier reasons and orders made should be read in conjunction with these reasons. 

4                     In the result, the first defendant was successful in establishing that no proper basis had been made out on the facts on the trial of the separate question for demonstrating that the action in rem was properly brought.  Put simply, the facts did not demonstrate that Mr Pantaloni was either the owner of the ship at the date of commencement of the action or that Mr Pantaloni was a demise charterer of the ship at the date of commencement.  Although various contentions were put forward and hypotheses identified, the findings of fact were that on the evidence neither position was made out.  Thus, the action in rem was not properly brought as the jurisdictional integers required by ss 17 and 18 of the Admiralty Act were not made out. 

5                     The first defendant sought and the plaintiff accepted at a directions hearing that an order for the determination of the separate question was appropriate as that question raised a threshold jurisdictional matter.  The first defendant sought orders that the proceeding be dismissed and the monies paid into Court to secure the release of the ship be paid out of Court to Mr Pantaloni. 

6                     In response, the plaintiff sought a freezing order on the footing that the only assets within the jurisdiction were the monies paid into Court and should those monies be released to the first defendant, there was a risk that the funds would be removed from the jurisdiction thus defeating any remedial order of the Court which might be made, arguably, in the in personam cause of action which was within jurisdiction by reason of the Admiralty Act.  The plaintiff’s claim on the contract in respect of goods, materials or services supplied to Mr Pantaloni in respect of the ship which represents a general maritime claim under the Admiralty Act is a claim in an amount of approximately $71,000.  The costs of the determination of the separate question as to the proceeding in rem might have been entirely avoided had Mr Pantaloni simply given an undertaking to preserve, within the jurisdiction, the funds paid into Court pending the determination of the general maritime claim.  Mr Pantaloni sought the preliminary determination of the in rem question on the footing that if Mr Pantaloni was meritorious on that question, it would follow that the action would be struck out and the funds released to him. 

7                     The question of the costs of the trial of the separate question was reserved for later determination by the orders of 24 June 2010 (see Orders 11 and 15).  The parties were directed to file and serve submissions in relation to costs and Order 15 provided for the determination of the question of costs on the papers unless a party sought to be heard on that question and so notified the Court. 

8                     The parties have not sought to be heard orally on the question of costs.  Written submissions have been received. 

9                     Mr Pantaloni contends that since he has been successful on the separate question he ought to have his costs.  The plaintiff seeks to identify in its submissions a basis upon which the proceeding was commenced reasonably in all the circumstances having regard to facts which were then before the plaintiff.  Nevertheless, the position is that the proceedings were commenced by the plaintiff based on a cause of action in rem resulting in the arrest of the ship which, on the trial of the separate question, was shown to be beyond jurisdiction.  That cause of action was struck out.  The plaintiff was given leave to re‑plead the statement of claim confined to the action in personam under the Admiralty Act.  The parties are presently engaged in discussions leading up to a proposed mediation of the claim. 

10                  Mr Pantaloni was unsuccessful in the sense that the contention that no jurisdiction subsisted in the Federal Court was unsound.  Mr Pantaloni was successful in demonstrating that the action in rem was beyond jurisdiction.  It seems to me that Mr Pantaloni ought to have his costs of the separate question although those costs ought to be discounted in the exercise of discretion under s 43 of the Federal Court of Australia Act 1976 to take account of two things. 

11                  First, Brisbane Slipways’ general maritime claim was within jurisdiction and thus it did not follow that the entire proceeding ought to be dismissed.  Secondly, the costs associated with the controversy on the jurisdictional point might well have been avoided had Mr Pantaloni given an undertaking to preserve, within the jurisdiction, the monies paid into Court pending the resolution of the claim.  Notwithstanding those factors though, Mr Pantaloni ought to have the substantial body of his costs on the question as he was shown to be correct on the in rem point. 

12                  Accordingly, the plaintiff will be ordered to pay 65% of the costs of Mr Pantaloni of and incidental to the trial of the separate question. 

Associate:

Dated:         28 September 2010