FEDERAL COURT OF AUSTRALIA
Programmed Total Marine Services Pty Ltd v Ships “Hako Endeavour”, “Hako Excel” and “Hako Esteem” (No 2) [2013] FCA 1261
IN THE FEDERAL COURT OF AUSTRALIA | |
PROGRAMMED TOTAL MARINE SERVICES PTY LTD ACN 009 231 476 Plaintiff | |
AND: | Defendant |
DATE OF ORDER: | 28 November 2013 |
WHERE MADE: | Sydney |
THE COURT ORDERS THAT:
1. The parties are to confer and within 14 days of the date of publication of the reasons for judgment are to file proposed agreed or competing orders, including as to costs, and a timetable for resolution of any outstanding issues and mutually convenient dates for a further hearing at 9.30am before 20 December 2013.
2. The proceedings are to be listed for hearing and the making of orders on a date to be determined and notified to the parties after compliance by the parties with order 1.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA | |
WESTERN AUSTRALIA DISTRICT REGISTRY | |
GENERAL DIVISION | WAD 88 of 2012 |
BETWEEN: | PROGRAMMED TOTAL MARINE SERVICES PTY LTD ACN 009 231 476 Plaintiff |
AND: | THE SHIP "HAKO EXCEL" Defendant |
JUDGE: | JAGOT J |
DATE OF ORDER: | 28 november 2013 |
WHERE MADE: | SYDNEY |
THE COURT ORDERS THAT:
1. The parties are to confer and within 14 days of the date of publication of the reasons for judgment are to file proposed agreed or competing orders, including as to costs, and a timetable for resolution of any outstanding issues and mutually convenient dates for a further hearing at 9.30am before 20 December 2013.
2. The proceedings are to be listed for hearing and the making of orders on a date to be determined and notified to the parties after compliance by the parties with order 1.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA | |
WESTERN AUSTRALIA DISTRICT REGISTRY | |
GENERAL DIVISION | WAD 89 of 2012 |
BETWEEN: | PROGRAMMED TOTAL MARINE SERVICES PTY LTD ACN 009 231 476 Plaintiff |
AND: | THE SHIP "HAKO ESTEEM" Defendant |
JUDGE: | JAGOT J |
DATE OF ORDER: | 28 november 2013 |
WHERE MADE: | SYDNEY |
THE COURT ORDERS THAT:
1. The parties are to confer and within 14 days of the date of publication of the reasons for judgment are to file proposed agreed or competing orders, including as to costs, and a timetable for resolution of any outstanding issues and mutually convenient dates for a further hearing at 9.30am before 20 December 2013.
2. The proceedings are to be listed for hearing and the making of orders on a date to be determined and notified to the parties after compliance by the parties with order 1.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
WESTERN AUSTRALIADISTRICT REGISTRY | |
GENERAL DIVISION | WAD 87 of 2012 WAD 88 of 2012 WAD 89 of 2012 |
BETWEEN: | PROGRAMMED TOTAL MARINE SERVICES PTY LTD ACN 009 231 476 Plaintiff
|
AND: | THE SHIP "HAKO ENDEAVOUR" First Defendant THE SHIP "HAKO EXCEL" Second Defendant THE SHIP "HAKO ESTEEM" Third Defendant
|
JUDGE: | JAGOT J |
DATE: | 28 november 2013 |
PLACE: | SYDNEY |
REASONS FOR JUDGMENT
1. THE ISSUES
1 These three proceedings are actions in rem under s 18 of the Admiralty Act 1988 (Cth) (the Admiralty Act). The plaintiff, Programmed Total Marine Services Pty Ltd (PTMS, referred to in some documents as TMS), claims from the defendants the costs of services which PTMS contends it supplied. While there is no question that PTMS supplied services and incurred costs in so doing the defendants, the ships Hako Endeavour, Hako Esteem and Hako Excel (the ships), contend that they are not liable for the costs on three grounds.
2 First, the defendants contend that the term of the deed pursuant to which the services had been supplied had expired before the services were supplied. Accordingly, there was no liability to pay for the services under the deed and, thereby, no liability of the defendants in these proceedings.
3 Second, the defendants contend that whether or not the term of the deed had expired, the deed on its proper construction did not create any obligation for payment for any services that might have been provided:
(a) after each ship had ceased to be engaged “in relation to the Marine Rock Transport” as provided for in the deed; and/or
(b) in or referable to the period before the commencement of the deed.
4 Third, the defendants contend that certain claims of PTMS do not fall within the scope of a general maritime claim as set out in, relevantly, s 4(3)(m) of the Admiralty Act (the only provision on which PTMS relies) and, thereby, are not recoverable from the defendants.
5 Other issues arise in respect of an application by PTMS to amend the writ and statement of claim to claim the same relief based on other causes of action said to arise from the same facts, the new causes of action being the existence of an implied contract founding liability or a quantum meruit claim. The defendants oppose the application to amend on the grounds of both lack of power and discretion and contend that, if permitted, the claims fail in substance in any event.
2. UNCONTENTIOUS FACTS
6 The essential primary facts are not in dispute.
7 The ships, and a fourth ship Hako Fortress, were each demise chartered by their common owner to Hako Offshore Pte Ltd (Hako) using the “BARECON 2001” Standard Bareboat Charter form. As bareboat charterer, Hako had the obligation to maintain and repair and to “man, victual, navigate, operate, supply, fuel, and whenever required, repair the Vessel during the Charter Period” (cll 10(a)(i) and (b)). This contract is the bareboat or demise charter as referred to in the evidence and the submissions of the parties.
8 In April 2010 Hako Offshore Australia Pty Ltd (Hako Australia) chartered the ships to Boskalis Australia Pty Ltd (Boskalis) using the “SUPPLYTIME 89” form. This contract is the time charter as referred to in the evidence and the submissions of the parties. By subsequent amendment Hako itself also became a party to this contract. Boskalis was a principal contractor providing services to the Gorgon liquefied natural gas project and needed the ships, which are all tugs, to tow rock from Henderson near Fremantle to Barrow Island off Western Australia.
9 On 25 June 2012 Hako and PTMS entered into a contract styled “Marine Manning and Services Agreement” under which PTMS agreed to provide crew for the manning of the ships and other services at agreed rates.
10 By March 2011 Hako was in debt to PTMS and the ships were arrested (for the first time) at the suit of PTMS. These arrests led to the negotiation and entry into a deed between PTMS, Hako and Boskalis. This is the deed which founds these proceedings.
11 The deed is dated 7 April 2011 and is styled “Deed of continuing services and assignment of debt”. Relevant provisions of the deed include the following:
BACKGROUND
A Hako was at all material times, and remains the demised charterer of the Hako Vessels.
B By the Manning Agreement TMS agreed to provide manning and catering services to Hako in respect of each of the Hako Vessels.
C TMS in all respects duly observed and performed its obligations under the Manning Agreement.
D Hako breached the Manning Agreement by failing to pay for the Services provided by TMS.
E On 24 March 2010:
(a) TMS instituted the Arrest Proceedings against the Hako Vessels for debts due and owing by Hako to TMS under the Manning Agreement.
(b) Pursuant to the Arrest Proceedings, the Hako Excel, Hako Endeavour and Hako Esteem were arrested at Henderson, Western Australia.
F At the time of the making of this document:
(a) The Hako Excel, Hako Endeavour and Hako Esteem remain under arrest.
(b) The total indebtedness owed by Hako to TMS under the Manning Agreement is $5,960,315.58.
(c) The cost of the Arrest Proceedings, including the expenses of the Admiralty Marshall, and the legal costs of TMS (inclusive of counsel’s fees) stands at $115,000.
G In reliance upon the obligations assumed by Hako and Boskalis under this document and the promises contained herein, TMS has agreed to discontinue the Arrest Proceedings and release the arrested Hako Vessels.
ako Vessels.
H Hako has agreed for TMS to provide the Services for the duration of the Term.
I Boskalis has agreed to purchase the Hako Debt from TMS for the Assignment Fees and take assignment of the right, title and interest in the Hako Debt.
…
Arrest Proceedings means Australian Federal Court proceedings instituted by TMS against the Hako Vessels in WAD 83, 84, 85 and 86 of 2011.
Assignment Fees means the amounts payable by Boskalis to TMS in accordance with clause 8.
Assignment Period means the period commencing on the Commencement Date and ending on the date when the Assignment Fees are received in full by TMS.
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Future Debt means the debt purchased by Boskalis from TMS in accordance with clause 8(a)(vii).
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Hako Debt means together the Past Debt and the Future Debt.
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Manning Agreement means the agreement evidenced in writing made on or about 25 June 2010 between TMS and Hako.
Marine Manning Services means the services described at clause 5.
Marine Rock Transport means the transport of rock material loaded on barges from Henderson to Barrow.
Other Services means the services described at clause 7.
Past Debt means the sum of $6,075,315.58 and $115,000, as referred to in paragraphs F(b) and F(c) respectively.
Personnel means any person employed or engaged by TMS and supplied by TMS to Hako for and in relation to the performance of the Services.
Proposal means the letter from TMS to Hako dated 10 February 2009, in which TMS provided a ‘Manning and Catering’ proposal to Hako, as varied by a letter from TMS to Hako dated 17 June 2010, copies which are attached at Annexure A.
Services means the supply of services by TMS to Hako as described at clause 4.
…
Time Charter means the time charter made on 6 April 2010 by Boskalis in respect of each of the Hako Vessels.
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Part 1: Services
2 Appointment of TMS as exclusive provider of the Services
Hako appoints TMS as the sole and exclusive provider of the Services for the Term.
3 Term
The term commences on the Commencement Date, and continues until the Marine Rock Transport is completed unless this document is terminated earlier in accordance with the terms of this document.
4 Services
The Services consist of the provision of the following services to or in respect of the Hako Vessels whilst such Hako Vessel(s) are engaged in relation to the Marine Rock Transport.
(a) Marine Manning Services;
(b) Catering Services; and
(c) Other Services.
5 Marine Manning Services
5.1 Description
Marine Manning Services means the supply of personnel by TMS to Hako in accordance with the terms of this document and during the Term.
5.2 Time and place of supply
TMS will supply all Personnel listed in the Proposal.
5.3 TMS to use qualified Personnel
TMS must ensure that all Personnel are suitably qualified and experienced.
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5.9 Training
Hako must provide any necessary induction and training which relates to the work place, whether or not it is on board a Hako Vessel, or prior to or upon the Personnel first working for Hako, and TMS will use reasonable endeavours to ensure that the Personnel attend any such induction and training as part of the Services.
Any further or specialist training which may be required is to be conducted at Hako’s cost unless otherwise specified in the Proposal.
…
5.13 Invoicing
TMS will invoice Hako fortnightly, copied to Boskalis for the Marine Manning Services provided in that past fortnight. For the avoidance of doubt, each of TMS and Hako agrees and acknowledges that Boskalis does not assume any liability to TMS, Hako or any other third party under any invoices for Marine Manning Services.
...
6 Catering Services
6.1 Description
Catering Services means the supply of provisions and related items for consumption and use by TMS to Hako on the Hako Vessels demise chartered by Hako and operating in Australian waters during the Term.
6.2 Time and manner of supply
TMS will supply the Catering Services at the times and in the manner set out in the Proposal.
6.3 Rates for Catering Services
Hako is liable to TMS for the Catering Services as set out in the Proposal.
6.4 Invoicing
TMS will invoice Hako monthly, copied to Boskalis, for the Catering Services provided in that month, unless the Proposal provides otherwise. For the avoidance of doubt, each of TMS and Hako agrees and acknowledges that Boskalis does not assume any liability to TMS, Hako or any other third party under any invoices for Catering Services.
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7 Other Services
7.1 Description
Other Services means the supply of any other services incidental to, or in relation to, the Marine Manning Services and/or Catering Services, and any other services specified in the Proposal by TMS to Hako on the Hako Vessels in Australian waters during the Term.
Other Services may include, without limitation;
(a) cleaning services;
(b) waste collection services;
(c) vessel management/procurement;
(d) maintenance and repair services; and
(e) permanent recruitment services.
7.2 Time and manner of supply
TMS will supply the Other Services at the times and in the manner set out in the Proposal.
7.3 Rates for Other Services
Hako is liable to TMS for the Other Services as set out in the Proposal.
7.4 Invoicing
TMS will invoice Hako monthly, copied to Boskalis, for the Other Services provided in that month, unless the Proposal provides otherwise. For the avoidance of doubt, each of TMS and Hako agrees and acknowledges that Boskalis does not assume any liability to TMS, Hako or any other third party under any invoices for Other Services.
…
Part 2: Purchase and assignment of debt
8 Payment of the Assignment Fees
(a) Boskalis shall pay the Assignment Fees to TMS as follows:
(i) on 23 March 2011, the sum of $1 million, the receipt of which is duly acknowledged by TMS, with a corresponding Assignment deemed to have occurred on the Commencement Date in accordance with clause 9;
(ii) upon execution of this document, the sum of $1 million;
(iii) on Wednesday 13 April 2011, the sum of $1 million;
(iv) on Friday 29 April 2011, the sum of $1,075,315.58;
(v) on Friday 27 May, the sum of $1 million;
(vi) on Friday 24 June, the sum of $1 million; and
(vii) subject to clause 8(b), from the Commencement Date until the end of the Term unless this document is terminated in accordance with its terms, Boskalis agrees upon the expiry of fourteen (14) days of receipt by it of a copy of an invoice issued by TMS to Hako for the Services after the Commencement Date, to purchase as debt such amount due under that invoice in accordance with clause 5.16 above.
(b) If any of the Hako Vessels are not on hire under the Time Charter for any time during the period covered by an invoice preceding the due date of a payment by Boskalis to TMS for purchase of any part of the New Debt, Boskalis may reduce the amount payable by it for the purchase of such debt pursuant to clause 8(a)(vii) in percentage terms (%), according to the following formula:
…
(c) Should this document be terminated in accordance with its terms before the completion of the Term, Boskalis shall not be required to pay the balance of any monies otherwise payable by it in accordance with clauses 8(a)(i) to 8(a)(vii) inclusive of this document, save that Boskalis shall make payment under clause 8(a)(vii) in respect of Services performed by TMS up to the date of termination with a corresponding Assignment deemed to have taken place in accordance with clause 9 below.
(e) TMS agrees and acknowledges that any monies payable by Boskalkis to TMS under this document are for the purchase of the Hako Debt and in no way does Boskalis assume any payment or other obligations for any invoices issued by TMS to Hako under this document or otherwise.
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10 Hako’s continuing debt obligations
(a) Hako acknowledges and agrees to TMS and Boskalis that to the extent:
(i) Debt is acquitted by Boskalis in accordance with clause 8(a) and 9, Hako remains liable to Boskalis for that amount; and
(ii) Debt is not acquired by Boskalis, Hako remains liable to TMS.
11 Continuing right to arrest
Any of the Hako Vessels may be validly and lawfully arrested by TMS or Boskalis in any jurisdiction to recover any amount due to that party under this document.
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16 Indemnity
Hako agrees to indemnify and hold harmless TMS, its officers, members, employees, and agents, and any related body corporate of TMS, its officers, members, employees, and agents against any loss, damages, costs, claims, causes of action, liabilities, and expenses (including, without limitation, legal expenses on a full indemnity basis), caused in whole or part by:
(a) any action or omission of any of the Personnel;
(b) any action or omission of Hako and its officers and employees, agents, suppliers, or subcontractors;
(c) any breach of this document by Hako;
(d) any warranty given by Hako under this document being incorrect or misleading in any way;
(e) the provision of the Services or any activity directly associated with the provision of the Services (including any work performed by the Personnel for Hako as part of the Services);
(f) any negligent act or failure to act by Hako’
(g) any personal injury (including death) or property damage caused by or contributed to by Hako or any of its representatives in connection with this document; or
(h) any act by Hako or any of its representatives (including the Personnel) which is not authorised by this Agreement.
If an indemnity payment is made by Hako under this clause 16, Hako must also pay TMS an additional amount equal to any tax which is payable by the recipient in respect of that indemnity payment.
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20 Time Charter
(a) in the event that any of the Hako Vessels come off hire under the Time Charter;
(i) Boskalis shall within two (2) Business Days notify TMS in writing of this fact and the reason for this; and
(ii) Boskalis shall within two (2) Business Days notify TMS in writing upon the vessel coming back on hire.
(b) For the duration of the Term Boskalis shall give TMS fourteen (14) days written notice of any expected completion of services under the Time Charter.
21 Demise charterer
(a) Hako warrants and agrees that:
(i) Upon execution of this document; and
(ii) For the duration of the Term, it is, and shall remain at all times, the sole demise charterer of the Hako Vessels.
12 PTMS commenced these proceedings against the ships and the Hako Fortress, writs being issued on 2 April 2012. Arrests of the ships subsequently took place. The Hako Esteem was arrested on 3 April 2012. The Hako Excel was arrested on 6 April 2012. The Hako Endeavour was arrested on 16 April 2012. The Hako Fortress was arrested in the interim on 11 April 2012. While under arrest PTMS continued to provide the crew and other services. Following the submission of undertakings to PTMS, the ships were released from arrest on 17 May 2012. On and from 19 May 2012, by arrangements between the owners of the ships and PTMS, PTMS’s fees for services were paid by Go Marine Group Pty Ltd (Go Marine). The disputed fees thus relate to the period before 19 May 2012 and, in the main, concern the period of the arrest.
13 It is convenient to note that, in the meantime, the owner of the ships had made a jurisdictional challenge. At first instance this challenge was heard on 17 May and dismissed on 1 August 2012 (Programmed Total Marine Services Pty Ltd v The Ship “Hako Fortress” (2012) 293 ALR 139; [2012] FCA 805). Judgment on the appeal from this decision was delivered on 26 February 2012, the appeal being dismissed in respect of the ships but allowed in respect of the Hako Fortress : Ships “Hako Endeavour”, “Hako Excel”, “Hako Esteem” and “Hako Fortress” v Programmed Total Marine Services Pty Ltd (2013) 211 FCR 369; [2013] FCAFC 21(Hako FFCA).
3. THE TERM OF THE DEED AND SERVICES DURING THE TERM
3.1 Positions of the parties
14 Leaving aside the proposed amendments and another point concerning the defendants’ pleading, PTMS’s claim is based on the deed. The defendants’ position is that:
some of the services provided and costs associated with those services claimed by [PTMS] were incurred after the term of the Deed had come to an end, according to its terms, and that those costs are therefore not recoverable under the Deed which [PTMS] now sues on.
15 The defendants’ primary argument is simple. “Term” is said in cl 1.1 of the deed to have “the meaning set out in clause 3”. Clause 3 says:
The Term commences on the Commencement Date, and continues until the Marine Rock Transport is completed unless this document is terminated earlier in accordance with the terms of this document.
16 The Commencement Date is defined in cl 1.1 to mean “the date of execution of this document by all parties” which was 7 April 2011.
17 The Marine Rock Transport is defined to mean “the transport of rock material loaded on barges from Henderson to Barrow”.
18 Accordingly, the defendants contend that the term of the deed ended with respect to each ship on the date the ship released its final rock-laden barge at Barrow Island. According to the defendants this occurred on 1 April 2012 for the Hako Esteem and the Hako Excel and 19 April 2012 with respect to the Hako Endeavour. As, however, the defendants had pleaded as the relevant date 3 April 2012 for the Hako Esteem and the Hako Excel, they accepted that the relevant date for the term of the deed having come to an end for those ships should be taken to be 3 April 2012. The defendants also noted that as they had pleaded an earlier date for the Hako Endeavour they should also be able to take advantage of that earlier date for that ship. However, acting on a pleading which amounts to a concession is one thing. Acting on a pleading which confers a benefit on the pleading party and which is contrary to the acknowledged facts is another. The best the defendants can do, accordingly, is the date of 19 April 2012 with respect to the Hako Endeavour.
19 If their primary position is not accepted the defendants contend for a range of other dates. Their first alternative is that the term of the deed ended with respect to each ship when Boskalis redelivered the ship under the time charter. As the defendants put it, after Boskalis redelivered each ship, the ship could no longer be engaged in the Marine Rock Transport and for that ship the Marine Rock Transport was complete. On this basis, the term of the deed ended for each ship as follows: (i) 6 April 2012 for the Hako Esteem and Hako Excel, and (ii) 16 April 2012 for the Hako Endeavour.
20 The defendants’ second alternative is that for each ship the term of the deed ended at the time each was arrested. From that time the ship was no longer engaged in the Marine Rock Transport and for that ship the Marine Rock Transport was complete. On this basis the term of the deed ended for each ship as follows: (i) 3 April 2012 for the Hako Esteem, (ii) 6 April 2012 for the Hako Excel, and (iii) 16 April 2012 for the Hako Endeavour.
21 The defendants’ third alternative is that the term of the deed ended when all of the ships were redelivered by Boskalis under the time charter. At that time the ships by definition were no longer engaged in the Marine Rock Transport, the the Marine Rock Transport was thereby complete, and the term of the deed thus ended. On this basis the deed ended on 16 April 2012 when the last of the ships was redelivered by Boskalis. Accordingly, services provided after that date are not recoverable under the deed and thus are not recoverable from the defendants in these proceedings.
22 The defendants’ fourth alternative is that the term of the deed ended when the final rock-laden barge was released from the Hako Endeavour on 19 April 2012. The defendants submitted that by this point “[a]t the very latest…the Marine Rock Transport was complete. There was no more rock to transport, all the rock-laden barges had been delivered to Boskalis and Boskalis had redelivered all of the ships”.
23 The defendants also contend that, irrespective of the Term, by cl 4 of the deed they can only be liable for the costs of Services provided whilst each ship was engaged in relation to the Marine Rock Transport and not otherwise.
24 PTMS contends that the scheme of the contractual relationships discloses that PTMS “was contracted to continue to provide services to the vessels under the Deed until the vessels were demobilised following the completion of the work for Boskalis. Moreover, the demobilisation period was obviously a period in which the vessels were still ‘engaged in relation to the Marine Rock Transport’ as referred to in cl 4”. Accordingly, the term of the deed “ended only on completion of demobilisation, including the service of returning personnel to Australia”. PTMS also said that:
As it happened, Go Marine took over Hako’s financial obligations with regard to the services provided by [PTMS] from 19 May 2012. But absent that, or some other premature termination of the Deed, [PTMS] would have been entitled to charge its services to the vessels under the Deed until the completion of demobilisation.
25 On this basis the term of the deed ended on 27 May 2012, which was the date on which the vessels were demobilised in Benoa (in fact, this was when the PTMS crew were removed from the ships and Go Marine directly crewed the ships for their subsequent return to Batamec).
26 PTMS’s first alternative position was that the term of the deed ended when the ships were released from arrest, which occurred on 17 May 2012. Its second alternative was that term of the deed ended when the final delivery of rock was in fact made to Barrow Island, rather than the mere release of the barge carrying the rock from the Hako Endeavour, which occurred on 22 April 2012. PTMS also submitted that it is incorrect to assume that services provided after the deed ended are not claimable. Provided the services are “in relation to” the Marine Rock Transport they are still services under the deed and claimable.
3.2 Discussion
27 PTMS referred to the statement of Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 at 995-996 quoted in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22] in the joint judgment of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ as follows:
In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.
28 The commercial context of the deed is clear. There are three parties to the deed. Each of these parties previously had entered into a contract with at least one other party to the deed.
29 Hence, Hako, as bareboat charterer, had entered into a time charter with Boskalis. Under the time charter the ships were to be engaged in rock transport activities off Western Australia. Boskalis paid fees to Hako for that purpose. Under the time charter the vessels were to be mobilised from “Singapore/Batam region” for a fee depending on whether delivery was to Henderson or Dampier in Western Australia and were to be redelivered to either Henderson or Dampier in Western Australia at which time a demobilisation fee was payable. Although the concepts of delivery and redelivery “do not signify any transfer of possession of the ship” they are used “in the sense of delivery into and redelivery out of the service of the charterers” (T Coghlin, AW Baker, J Kenny and JD Kimball, Eds., Time Charters, 6th Ed, London 2008 at [1.13]). Accordingly, as between Hako and Boskalis under the time charter the ships were at Boskalis’s service from their mobilisation in “Singapore/Batam region” and ceased to be at Boskalis’s service once Boskalis redelivered the ships to either Henderson or Dampier in Western Australia.
30 Hako had also entered into the Marine Manning and Services Agreement with PTMS. Under that agreement Hako paid fees to PTMS for the provision of services including services to the ships such as manning and catering. The background to that agreement records that the “Client”, Hako, owns or operates the vessels in Australian waters and that PTMS “carries on the business of providing services to the marine industry including…and other services to the operators of vessels whilst in Australian waters”.
31 Under the agreement:
Marine Manning Services are the provision of personnel for the manning of a vessel owned or operated by the Client in Australian waters (cl 4.1).
The Client must pay PTMS for the Marine Manning Services at the Rates set out in the Proposal (cl 5.1).
Catering Services are the provision of provisions and related items for consumption and use on a vessel owned or operated by the Client in Australian waters (cl 6.1).
The Rates to be paid by the Client to PTMS for the Catering Services will be as set out in the Proposal (cl 6.3).
PTMS may provide other services to the Client the Rates for which will be as set out in the Proposal (cll 7.1 and 7.2).
32 In the schedule to this agreement the “Vessel” is defined as “Hako vessels deployed on the Boskalis contract”. The Boskalis contract must be the time charter of the vessels from Hako to Boskalis.
33 The Proposal is contained in Annexure A to the agreement, which was subsequently amended by Annexure C. The manning rates are in a table containing two alternatives, “mobilisation/ demobilisation voyages and non-construction projects” and “operations on location engaged on a construction project”. The Proposal states PTMS’s belief that the construction payment is not payable. Exclusions from the day rate include foreign port allowances for mobilisation and demobilisation of the vessel from a foreign port. The Proposal states that PTMS “would undertake to provide crew mobilisation and demobilisation at cost plus 6%”.
34 As the recitals to the deed record, Hako failed to pay PTMS for the provision of services under the Marine Manning and Services Agreement. This led PTMS to cause the Vessels to be arrested for the debts due and owing to it by Hako ($5,960,315.58, and arrest costs of $115,000). The Vessels are the four nominated ships (including the Hako Fortress) described as “engaged in relation to the Marine Rock Transport”. PTMS agreed to discontinue the arrest proceedings and release the arrested vessels “[i]n reliance upon the obligations assumed by Hako and Boskalis under this document and the promises contained herein”. The promises, as the recitals disclose, concern Hako agreeing to PTMS providing the Services “for the duration of the Term” and Boskalis agreeing to purchase “the Hako Debt from [PTMS]” for the Assignment Fees.
35 Hako agreed to PTMS providing the Services for the Term in Pt 1 of the deed, in particular see cll 2, 3 and 4.
36 Both the Hako Debt (defined to mean the Past Debt and the Future Debt each as defined in cl 1.1) and the Assignment Fees are regulated by cl 8. Subclauses 8(a)(i)-(vi) provide for the staged payment of the Assignment Fees, those fees adding up to the amount of the Past Debt. Subclause 8(a)(vii) requires Boskalis to purchase the Future Debt, in effect the amounts Hako will owe to PTMS on the issue and non-dispute of invoices by PTMS to Hako for the provision of services “from the Commencement Date until the end of the Term”. Clause 9 then effects an assignment by PTMS to Boskalis of the Hako Debt (being the Past Debt and the Future Debt).
37 Boskalis thus acquired from PTMS the right to sue Hako for the Past Debt (the amounts Hako owed PTMS as at the date of the deed) and the Future Debt (the amounts Hako would owe PTMS for services rendered after the commencement of the deed) in exchange for Boskalis paying to PTMS the amount of the Past Debt and agreeing to pay to PTMS the amount of the Future Debt and Hako agreeing that PTMS should continue to provide and invoice Hako for the services. To the extent that Boskalis did not acquire any Debt, Hako remained liable to PTMS but otherwise, for all Debt Boskalis acquired, Hako was liable to Boskalis (cl 10).
38 By these means:
Boskalis and Hako gained the benefit of the ships being released from arrest.
Boskalis gained the benefit of the use of the ships which it had chartered to complete the rock transport work.
PTMS gained the benefit of the payment of the debts Hako owed it to the date of the deed and the assurance of Boskalis that it would pay for PTMS continuing to provide the services during the term of the deed.
39 This is the context in which the parties to the deed agreed that:
Hako appoints [PTMS] as the sole and exclusive provider of the Services for the Term (cl 2).
The term commences on the Commencement Date, and continues until the Marine Rock Transport is completed unless this document is terminated earlier in accordance with the terms of this document (cl 3).
The Services consist of the provision of the following services to or in respect of the Hako Vessels whilst such Hako Vessel(s) are engaged in relation to the Marine Rock Transport (cl 4):
(a) Marine Manning Services;
(b) Catering Services; and
(c) Other Services.
40 In this context I accept that the meaning of “until the Marine Rock Transport (that is, the transport of rock material loaded on barges from Henderson to Barrow) is completed” in cl 3 of the deed is ambiguous. It is ambiguous because different views may be taken about the event or events which determine when the Marine Rock Transport is completed. The context provided by the terms of the deed as a whole, and the objective circumstances in which it was made, are thus important.
41 First, I accept that the parties could not have intended the term of the deed necessarily to end the moment the last barge carrying rock was released from the ships. As PTMS submitted, a contract for the provision of crewing services, which the deed is, is subject to inevitable practical constraints. None of the parties could have intended that on the last barge carrying rock being released from the ships PTMS, from that moment would be no longer obliged to supply the Marine Manning Services, the Catering Services and such Other Services as required incidental to those services. Almost by definition, the ships would be at sea in Australian waters at that time. PTMS could not, at that time, unilaterally cease to provide the Marine Manning Services, the Catering Services and such Other Services as required. Equally, Hako (and, through the provisions of the deed, Boskalis) was obliged to pay for those services. The nature of the contract demands that the completion of the Marine Rock Transport be given some meaning other than the time at which the last barge carrying rock was released from the ships.
42 Second, I do not see how the arrests can determine when the Marine Rock Transport was completed. The Marine Rock Transport may or may not have been completed at the time of the arrests. The arrests caused the ships to cease the transporting activities for the period of the arrests but whether or not the Marine Rock Transport was completed or not does not have any necessary relationship to the arrests. The same must be said of the release from the arrests.
43 Third, I do not see how the term of the deed can vary on a ship-by-ship basis. The deed has one Term only. It started on the Commencement Date (the date of execution of the deed by all parties, 7 April 2011) and continued “until the Marine Rock Transport is completed”, unless earlier terminated (which no party suggested). Accordingly, I do not accept that the Term of the deed might have ended on different dates by reference to the activities of different ships. It seems to me that this is one purpose of cl 4, which identifies the Services as the Services “whilst such Hako Vessel(s) are engaged in relation to the Marine Rock Transport”. In other words, one or more ships may no longer be “engaged in relation to the Marine Rock Transport”. Any services to those ships are not Services within the meaning of the deed. However, provided at least one of the ships (the Hako Vessels as defined) is “engaged in relation to the Marine Rock Transport”, the Marine Rock Transport is not completed within the meaning of cl 3 and the Term of the deed continues.
44 Fourth, although at one level of generality I accept PTMS’s submission that a contract for crewing services “practically requires a mobilisation event and a demobilisation event for the vessel to be handed over …and to then be handed back again”, that submission does not confront the particular facts of this case. In the present case, the deed was entered into on 7 April 2011 at a time when the ships had already been mobilised and were in Australian waters crewed by PTMS personnel. Accordingly, the deed did not practically have to provide for mobilisation and it did not do so. Nor did it provide for demobilisation. While the Proposal which formed part of the Marine Manning Services Agreement (as amended) also forms part of the deed, nothing in the deed binds PTMS to demobilise the ships to any particular location or for Hako (or Boskalis) to pay for demobilisation. The Proposal contains PTMS’s rates for demobilisation, if demobilisation is required, but that is different from the existence of any contractual obligation on PTMS to provide Services until demobilisation or on Hako (or Boskalis) to pay for those Services until demobilisation. To the contrary, PTMS was obliged to provide the Services during the Term as defined and Hako (or Boskalis) was obliged to pay for those Services. It follows that I do not accept that PTMS was necessarily providing Services under and in accordance with the deed until demobilisation (or, more accurately, the removal of the PTMS crew from the ships) had been effected in Benoa on 27 May 2012. In this regard I accept and adopt the defendants’ submission as follows:
As is clear from the terms of the Deed and from the affidavit of Mr Triggs… Hako did not have the working capital to continue to provide services under the time charter with Boskalis. Boskalis’ interest was to ensure the continued engagement of the Vessels in the Marine Rock Transport so as to meet its obligations to the Gorgon Gas Project. Boskalis had no interest in continuing to purchase Hako’s debt to the Plaintiff after such time as the Vessels ceased to be engaged in transporting rock to Barrow Island.
45 Fifth, although I accept that the termination of the time charter might be relevant to determining when the Marine Rock Transport is completed, the deed did not define its Term by reference to the conclusion of or redelivery by Boskalis under the time charter. Clause 20(b) of the deed, which requires Boskalis to give PTMS 14 days’ written notice of any expected completion of services under the time charter, suggests (not unexpectedly) that the parties anticipated that the Marine Rock Transport was likely to have been completed at or around the same time as the conclusion of the time charter. The giving of 14 days’ notice, in the context of the deed, should be understood as ensuring that PTMS had warning of when the time charter (and thus the Marine Rock Transport) was likely to have concluded so that suitable arrangements could be made for it to cease providing the Services in a safe and practical manner.
46 Sixth, I accept PTMS’s submission that cl 3 of the deed has to be understood in the light of cl 4. Clause 4 contemplates that the ships will be providing Services under the deed while the ships “are engaged in relation to the Marine Rock Transport”.
47 Construed in this context, I consider that the Marine Rock Transport was not concluded, and thus the Term of the deed had not come to an end, for so long as any of the ships (the Hako Vessels as defined) was “engaged in relation to the Marine Rock Transport”. On this basis I do not accept PTMS’s submission that there might be services provided within cl 4 after the expiry of the Term in cl 3. For the reasons given I prefer the construction that when no Hako Vessel is engaged in relation to the Marine Rock Transport, the Marine Rock Transport is completed within the meaning of cl 3, so that the Term has thereby come to an end.
48 In this context, the meaning of “engaged in relation to the Marine Rock Transport” in cl 4 of the deed is significant. I consider that the phrase is concerned with the concept of physical engagement. That is, the physical act of engagement defines the contractual rights and obligations of the parties in cl 4. Ships are engaged in the Marine Rock Transport when they are involved or used or employed in such transport. They are engaged “in relation to” the Marine Rock Transport when there is a sufficient connection between them and their involvement, use or employment in the Marine Rock Transport. The words “in relation to” broaden the scope of cl 4 from what it would have been had the requirement been that the ships be engaged “in” the Marine Rock Transport. The words permit and require a certain degree of connection between the engagement of the ships and the Marine Rock Transport.
49 It has been said that the nature of the connection required depends on the context, the issue in each case being the sufficiency or materiality of the connection or relationship (J & G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation (2000) 96 FCR 402; [2000] FCA 196 at [23]-[26]).
50 The sufficiency of the connection in this case can be tested in various ways. Ultimately, of course, the existence of a sufficient connection between the ships and the Marine Rock Transport is a question of fact. As such, for the purposes of the Term in cl 3, the onus is on PTMS to prove that at least one of the Hako Vessels was engaged in relation to the Marine Rock Transport during the period alleged to constitute the Term. For the purposes of the services being Services within cl 4, the onus is on PTMS to prove that each of the Hako Esteem, Hako Excel and Hako Endeavour was engaged in relation to the Marine Rock Transport during the period alleged to constitute the Term.
51 At the time the ships were arrested each was off Dampier in Western Australia. Each ship was manned by a Master and crew provided by PTMS under the deed. At the time of its arrest on 11 April 2012 the Hako Fortress (one of the Hako Vessels under the deed and thus relevant to the issue of the Term of the deed) was towing a barge laden with rock which was part of the Marine Rock Transport. At the time of its arrest on 16 April 2012 the Hako Endeavour was also towing a barge laden with rock which was part of the Marine Rock Transport. The barge laden with rock attached to the Hako Endeavour was not released until 19 April 2012. It follows from this that the Marine Rock Transport was not complete until, at the earliest, 19 April 2012.
52 That Boskalis had given notices of redelivery of each of the ships on 10 April 2012 for the Hako Esteem and Hako Excel, backdated to 6 April 2012 as the redelivery date, and on 19 April 2012 for the Hako Endeavour, backdated to 16 April 2012 as the redelivery date, cannot alter the fact that the Marine Rock Transport was not complete as at the redelivery dates and, accordingly, the Term of the deed had not ended.
53 I have set out above my view that the parties could not have intended the release of the last rock-laden barge at Barrow Island to mean that the Marine Rock Transport was necessarily complete and the ship, from that moment, was no longer engaged in relation to the Marine Rock Transport. As PTMS said, practical considerations preclude that construction of cl 3 of the deed. While the deed contemplated at least 14 days’ notice from Boskalis to PTMS of the completion of services under the time charter, which may be inferred to have been an adequate period for PTMS to cease providing the Services in a safe and practical manner, it is not apparent on the evidence that any such notice was given.
54 At the other end of the time scale the evidence discloses that on 17 May 2012 PTMS entered into an agreement with Go Marine the purpose of which was for PTMS to provide services to enable the transport of the ships to Benoa with PTMS’s crew and PTMS continuing to provide services to the ships. In my view it is clear that the ships were no longer engaged in relation to the Marine Rock Transport at the time of entry into this agreement on 17 May 2012. I do not accept PTMS’s submissions to the contrary.
55 Apart from the release of the barge from the Hako Endeavour on 19 April 2012 and the fact that PTMS continued to provide the Marine Manning Services, Catering Services and Other Services to the ships there is no suggestion that the ships did anything in connection with the Marine Rock Transport after 19 April 2012. By that stage, moreover, the Hako Endeavour had been under arrest for three days and the other ships for some weeks. The evidence on behalf of PTMS does not disclose when negotiations involving the Go Marine proposal started. However, according to Aw Chin Leng, the former Deputy President of Otto Marine Pte Ltd (the parent company of the joint venture which owns the ships), discussions with Glenn Triggs, the Chief Executive Officer of PTMS who gave evidence in these proceedings, had started by at least 9 April 2012. Mr Triggs went to Singapore and at a meeting with the owners’ representatives on 9 April 2012 was told to the effect that:
There is no way that Hako can pay PTMS debt. As owners we are stepping in. The bareboat charter with Hako is dead. We essentially are coming in to try and secure the release of the vessels…
[t]he discussion was on 9 April with Mr Glen Triggs was, number one, if we cannot swap the crew with people from the crew from Go Marine, if we can’t do that can you go down to minimum manning so that we can reduce the cost of the crewing and this, what you call the vessel, so that we can then find, you know, until the lifting of the arrest, you know, the swapping of crew.
56 I accept this aspect of the evidence of Mr Aw Chin Leng. These discussions were not referred to by Mr Triggs one way or another. The discussions make sense in the context. Negotiations involving Go Marine occurred thereafter and, as contemplated, Go Marine stepped in on 19 May 2012, the relevant agreement between Go Marine and PTMS having been entered into on 17 May 2012, being the same date the ships were all released from arrest.
57 To my mind the inference that should be drawn is that, apart from the rock-laden barges attached to the Hako Fortress and the Hako Endeavour, it was apparent to all parties that the ships were not engaged in relation to the Marine Rock Transport from 19 April 2012 and for the duration of their arrest. There is no evidence to indicate that the Hako Esteem and Hako Excel were doing anything in connection with the Marine Rock Transport at the time they were arrested other than awaiting their demobilisation. As discussed, I accept that those ships did not cease to be engaged in relation to the Marine Rock Transport from the moment they released their last rock-laden barge. But I do infer that they had released their last rock-laden barge some time before their arrests. By 19 April 2012, the date on which Hako Endeavour released its last rock-laden barge, these ships had been under arrest for two weeks and PTMS had met with the owner and been told that the owner was going to secure the release of the ships from arrest as Hako did not have the means to do so and that the owner wanted Go Marine to take over the ships from PTMS but, if this could not happen during the arrests, then PTMS should reduce crew levels to the minimum in anticipation of Go Marine taking over the ships after their release. Having regard to these circumstances, in no view, to my mind, were the ships engaged in relation to the Marine Rock Transport after 19 April 2012. The fact that the unloading of the rock from the barge was not completed until 22 or 23 April 2012 is immaterial. The unloading of the barge is a separate activity from the Marine Rock Transport in which the ships were engaged. From 19 April 2012 the ships were engaged in the separate task of being subject to negotiations between PTMS and the owners to secure the release of the vessels and their subsequent transport back to Benoa.
58 In my view, the connection between the return of the ships to Benoa and the Marine Rock Transport is too tenuous and insubstantial to support a conclusion that the ships remained engaged in relation to the Marine Rock Transport in that period. It is true that, but for the Marine Rock Transport, the ships would not have had to travel from Australia to Indonesia. This causal connection to the Marine Rock Transport, however, is insufficient to warrant characterising the ships as “engaged in relation to the Marine Rock Transport”. This means that at some time on and from 19 April 2012 the ships were no longer engaged in relation to the Marine Rock Transport. As indicated, I consider the date 19 April 2012 is the relevant date because, by that time, negotiations between PTMS and the owner which culminated in the 17 May 2012 agreement between PTMS and Go Marine must have been well underway and the last barge had been released from the last of the ships.
59 The fact that PTMS bears the onus of proof supports this conclusion. Apart from identifying the existence of the 17 May 2012 agreement with Go Marine PTMS’s evidence, as noted, did not canvas events between PTMS and the owner between the date of the arrests and 17 May 2012. For the reasons given I accept that the evidence supports the continuation of the Term until 19 April 2012. Beyond that date, however, apart from PTMS still supplying the crew whilst, I infer, negotiations with the owner continued, the evidence from PTMS is sparse. If the ships were still engaged in relation to the Marine Rock Transport after the last barge was released rather than merely awaiting the outcome of the negotiations between PTMS and the owners, then it might be expected that PTMS would have adduced that evidence. It did not and, accordingly, the inference that the ships had ceased to be engaged in relation to the Marine Rock Transport on that date is more readily drawn.
60 The terms of the bareboat charter do not affect this conclusion. Whatever the provisions of the bareboat charter, PTMS’s claims are brought under the deed and the deed alone governs Hako’s (and thus the defendants’) liability. In circumstances where the parties to the deed agreed that PTMS would provide and be paid for the Services during the Term, with the Term being defined as continuing until the Marine Rock Transport was complete and the Services being Services “whilst such Hako vessel(s) are engaged in relation to the Marine Rock Transport”, I cannot see any basis for the notion that the Term continues until delivery in accordance with the bareboat charter or, for that matter, demobilisation of the PTMS crew in Benoa carried out pursuant to a separate arrangement with Go Marine. It cannot be said that Go Marine “took over” Hako’s financial obligations under the deed, as PTMS submitted, when there is no indication in the deed that Hako agreed in that instrument to pay for the Services other than whilst the ships were engaged in relation to the Marine Rock Transport. As the defendants submitted, the agreement with Go Marine was a separate arrangement brokered by PTMS and the owners of the ships, not with Hako.
61 For these reasons I consider that the Marine Rock Transport was completed on 19 April 2012. The Term of the deed ended on that date.
62 Further, I am satisfied that on and from that date none of the ships were engaged in relation to the Marine Rock Transport. Accordingly, no Services provided to the ships after 19 April 2012 were provided under the deed. They were provided pursuant to an anticipated further agreement between PTMS and the owners via Go Marine, which eventuated on 17 May 2012.
63 There is a further question whether Services were provided to the Hako Esteem and Hako Excel while they were engaged in relation to the Marine Rock Transport from the date of their arrests on 3 and 6 April 2012 respectively until 19 April 2012. For the reasons given I am satisfied that Hako Endeavour was engaged in relation to the Marine Rock Transport until 19 April 2012 and thus the services provided to that ship are Services under the deed, subject to the resolution of the other issues in dispute between the parties. The Hako Esteem and Hako Excel are not necessarily in the same position as the Hako Endeavour.
64 As discussed, the evidence does not disclose when the Hako Esteem and Hako Excel delivered their last rock-laden barges to Barrow Island. However, it is apparent that they continued to be manned by PTMS at the time of their respective arrests. Moreover, there is no evidence that Boskalis had given to PTMS notice of the completion of the services under the time charter as required by cl 20(b) of the deed. The notices of delivery that Boskalis served on Hako, according to Mr Triggs, were not provided to PTMS and I accept this evidence. Further, although Boskalis backdated the notices, they were not in fact served until 10 April 2012 for the Hako Esteem and Hako Excel. This evidence indicates that those ships were engaged in relation to the Marine Rock Transport until at least 6 April 2012 and, in reality, until 10 April 2012. For the same practical reasons which PTMS pointed out I do not consider that the unilateral actions of Boskalis could determine when the Marine Rock Transport was complete. While I accept that there is necessarily an element of arbitrariness in identifying the date when these ships ceased to be engaged in relation to the Marine Rock Transport as 19 April 2012, there is a rational basis for identifying this as the date when the connection between the ships and the Marine Rock Transport was no longer sufficiently material to satisfy the description in cl 4 of the deed.
65 First, the deed dealt with the ships as a group, the Hako Vessels. Clause 4 recognised that one or more ships may cease to be engaged in relation to the Marine Rock Transport before some or other ship, but here I am satisfied that the Hako Esteem and Hako Excel were still so engaged at the time of their arrests for the reasons given. The issue is thus when they ceased to be so engaged.
66 Second, and as I have said, the mere fact of the arrests did not automatically change the ships from being engaged in relation to the Marine Rock Transport into not being engaged in relation to the Marine Rock Transport.
67 Third, the parties contemplated that 14 days’ notice would be adequate for Boskalis to inform PTMS that the services under the time charter would be completed. This involves implicit acceptance of PTMS’s proposition that it could not be free to cease providing Services under the deed other than in a safe and practical manner. To do so some time, measured in several days not hours, may well be required.
68 Fourth, PTMS was negotiating with the owners for release of the ships from 9 April 2012 onwards. While not a period of 14 days between 9 and 19 April 2012, it must have been apparent to all parties to the deed that the ships were no longer engaged in relation to the Marine Rock Transport from some time after 9 or 10 April 2012, leaving aside the rock-laden barges still attached to the Hako Fortress and Hako Endeavour.
69 Finally, the last barge was removed from the Hako Endeavour on 19 April 2012. From that date, the issues were release of the ships from arrest and their transport back to Indonesia or Singapore. The working out of these arrangements had nothing to do with the Marine Rock Transport other than the simple causal connection that the ships were in Australian waters and arrested there because of the Marine Rock Transport.
70 These reasons support the inference I draw that the Hako Esteem and Hako Excel also ceased to be engaged in relation to the Marine Rock Transport on 19 April 2012.
71 For these reasons PTMS is not entitled under the deed to any costs relating to services provided after 19 April 2012.
4. GENERAL MARITIME CLAIM OR NOT?
72 There are two principal issues between the parties in this regard.
4.1 The estoppel argument
73 The first issue is estoppel. PTMS contends that the defendants are estopped from asserting that the classes of costs underlying the claims identified are not general maritime claims as provided for in s 4(3) (specifically, s 4(3)(m) as the only possibly applicable provision) of the Admiralty Act. The estoppel is said to arise from the decision of the Full Court in Hako FFCA.
74 Section 4(3)(m) identifies as a general maritime claim “a claim in respect of goods, materials or services (including stevedoring and lighterage services) supplied or to be supplied to a ship for its operation or maintenance”. PTMS claims for various fees for services rendered including booking and related fees, disbursements, handling fees, management fees and a retention and continuity allowance (or RCA).
75 Hako FFCA concerned challenges to jurisdiction. It is sufficient for me to record that I accept the following submissions for the defendants as reasons that an estoppel cannot arise by reason of the judgment in Hako FFCA:
Issue estoppel operates to prevent a party from asserting a matter contrary to a finding of fact or law made in the course of a prior judicial determination. The estoppel operates only with respect to such findings as were legally indispensable to the prior judgment: Blair v Curran (1939) 62 CLR 446 per Dixon J at pp. 531-532.
On the question of jurisdiction, the issue was not whether each of the particular costs comprising the Plaintiff’s claims in these proceedings were in fact within s.4(3)(m). Rather, it was whether the Plaintiff’s claim as it was formulated fell or was capable of falling within the description in s.4(3)(m). Because the judgments below were decisions on jurisdiction, the only legally indispensable finding of the Full Court in this regard was that the Plaintiff’s claim as formulated (or at least some part of the Plaintiff’s claim) could be characterised so as to come within that description. It is not disputed that some parts of the Plaintiff’s claim did. In determining whether there was jurisdiction, the Full Court was not required to look to the actual claims; only whether a claim of the nature asserted by the Plaintiff was capable of falling within the description in s.4(3)(m): Owners of “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 422 and 426-27. The precise issues now raised by the Defendants’ paragraph 8(c) defence were not raised or argued before the Full Court. Nor were they disposed of by the Full Court’s judgment. That Court’s determination of the issues before it does not give rise to an issue estoppel in relation to whether the actual claims are within jurisdiction.
4.2 Services supplied to a ship?
76 The second issue is whether the services in question were supplied to a ship or were for the general benefit of PTMS and/or Hako.
77 As the defendants submitted:
It is a well established principle that to fall within s. 4(3)(m) the goods, materials or (as here) services must have been supplied to a ship and not to the shipowner: Port of Geelong Authority v The ‘Bass Reefer’ (1992) 37 FCR 374 at 385.5, 387.4; Patrick Stevedore No.2 Pty Ltd v Proceeds of the Sale of the Vessel MV Skulptor Konenkov (1997) 75 FCR 47 at 72; Patrick Stevedore No.2 Pty Ltd v Proceeds of the Sale of the Vessel M V Skulptor Konenkov (1997) 150 ALR 651 at 660 to 664; Opal Maritime Agencies Pty Ltd v. Proceeds of the Sale of the Vessel MV Skulptor Konenkov (2000) 98 FCR 519; [[2000] FCA 507] at [130].
78 The defendants contended that the following claims could not fall within s 4(3)(m):
a) Booking fees, chargeback handling fees and refund fees – these were incurred by Plaintiff as a consequence of its use, for its benefit, of a travel management service provider to book crew travel and accommodation. Therefore these costs are in respect of services provided to the benefit of the Plaintiff, not to the ships for their operation or maintenance.
b) Disbursement fees (NZ) – these items constitute an overhead of the Plaintiff, being a 5% expense which the Plaintiff was charged by its New Zealand related entity for arranging for the provision of New Zealand crew. This is a cost in respect of a service provided to the Plaintiff by its associated company and for the Plaintiff’s benefit, and not to the ships for their operation or maintenance;
c) Handling fee of 6% – this mark-up was applied by Plaintiff to the costs of services, except manning, provided to the ships. It functions as the Plaintiff’s remuneration for the service it provides to Hako generally, not a cost in respect of the services provided to the ships;
d) Management fee of 8% - this fee is included in manning rates charged (CB2 tab 1 at [98]). It also represents the Plaintiff’s remuneration for the services it provides to Hako generally, not a cost in respect of services provided to the ships for their operation or maintenance;
(e) Retention and Continuity Allowance – this is an allowance payable to crew pursuant to an enterprise agreement negotiated by Boskalis and the Australian Workers’ Union to “provide an incentive for BKA’s maritime employees and those of its contractors to continue their employment until completion and to work in a co-operative and productive manner while required on the Gorgon Project”. Thus it is a cost of the overall Project, and not a cost in respect of services provided to the ships for their operation and maintenance;
79 PTMS submitted that:
The true question is whether the services supplied under the Deed are services which are correctly described as supplied to the vessel. That question of characterization requires an assessment of the connection of the services to the operation of the vessel (Port of Geelong Authority v Ship “Bass Reefer” (1992) 37 FCR 374 at 387). See also The “Edinburgh Castle” [1999] 2 Lloyd’s Rep 362, The “Nore Challenger” [2001] 2 Lloyd’s Rep 103, The “Turakina” (1998) 154 ALR 666 at 678 Ins 40-50, The “Sydney Sunset” [2001] FCA 210 at [10]-[17].
The defendants seek to separate certain charges out from others that arise from the same services. That is not permissible. It is the services and supplies that characterise the claims, not the way in which the charges therefor are structured. Each charge was an agreed charge, or basis for charging, under the Deed for the services.
Dealing with each of the challenged items:
(1) Booking fees, chargeback handling fees and refund fees: the relevant service to the vessel is the plaintiff’s service in arranging the transport and accommodation of the crew member to get him or her to or from the vessel. That is a service to the vessel for its operation. The fact that the plaintiff pays another service provider to perform part of the service does not detract from the service to the vessel. On the defendants’ argument even the airfare would not be claimable because the plaintiff could or should have undertaken that service itself and not contracted an airline to perform it.
(2) Disbursement fees (NZ): the relevant service is the provision of the crew member to the vessel. The charge for that service, which happens to include an amount paid to a NZ crew provider, was charged under the Deed (it is not challenged under the paragraph 8(b) defence). The service remains one for the operation of the vessel.
(3) Handling fee: this is merely part of the charge for the service, it does not affect the service or its nature. The appropriate question in each case is not how the charge was made up or derived, but what was the nature of the service or supply.
(4) Management fee: the same reasoning applies. The fee covers the plaintiff’s overheads, and contributes to the plaintiff’s profit on the work, if any. It has no bearing on the nature of the service provided. The Proposal specifically allows for the fee as part of the daily rate for manning, the service being the manning of the vessel.
(5) RCA: once again, the service was the provision of crew to the vessel. Part of the expense incurred for that service, and hence the cost to the plaintiff, was the employee’s entitlements to remuneration including the RCA. The defendants’ submission that this is not a cost in respect of a service provided to the ships is not understood: if the RCA had not been paid there would have been no crew to supply to the ships. In order to provide the service, the plaintiff incurred the RCA cost.
80 In Patrick Stevedores No 2 Pty Limited v Proceeds of the Sale of the Vessel Konenkov (1997) 75 FCR 47 at 72 Sheppard J described the distinction between services to a ship and a shipowner as a “fine one”. This is true. It has also been said that “[w]hether or not services are supplied to a ship is to be determined at the time when the services are supplied as a question of fact: Port of Geelong Authority v The “Bass Reefer” (1992) 37 FCR 374 at 385; Patrick Stevedores No 2 Pty Ltd at 417” (Opal Maritime Agencies Pty Ltd v “Skulptor Konenkov” (2000) 98 FCR 519; [2000] FCA 507 at [119]).
81 While I accept PTMS’s submission that the services in question were all within the scope of and agreed between the parties to the deed, that does not answer the question whether the services, when supplied, were services to the ships. More to the point is PTMS’s submission that what the defendants seek to do in respect of all items other than the RCA is to separate out from a service a particular charge for that service. Accordingly, the booking fees, chargeback handling fees and refund fees are all part of the charges for the provision of the service of arranging transport and accommodation for the crew of the ships necessary to enable that crew to get to and from the ships. Characterising the charges as a benefit to PTMS so that PTMS did not have to have an in-house travel management branch misses the point. The question is whether the claim is in respect of a service provided to a ship. The charge is not the service. The service that PTMS provided is the supply of crew to the ships. It charged for that service. It is inappropriate to apportion the charges for that service and then attempt to ascertain whether the charges as apportioned involved a supply of a service to a ship. It is possible to imagine multiple ways in which a service provider such as PTMS might structure its business which might influence how it might charge for its services. Section 4(3)(m) is not concerned with how a business or charges for services are structured. It is concerned with whether the services are supplied to the ship or not. The booking fees, chargeback handling fees and refund fees are part of the fees for supplying crew to the ships and thus are within s 4(3)(m). The same conclusion applies to the disbursement fees, the handling fees and the management fees. They are all part of a charge for a supply of a service to the ships. The fact that PTMS has structured the charges as a flat percentage rate of a base charge and imposes those charges on all of its work because that suits PTMS’s business model does not alter the character of these charges. In this particular case the charges were for particular services to these particular ships – services of providing crew, catering and other services to the ships.
82 The RCA requires further consideration. The defendants’ position was that because the RCA was paid over and above the wages of the crew and applied generally to all crew involved in the project and not just the crew of these ships it was a payment for the benefit of Boskalis and the project overall and not the supply of a service to the ships. I do not accept that this conclusion, that the claim is not for the supply of a service to the ships, follows from the preceding propositions. The fact that a service to a ship is not exclusive to that ship does not mean that there is no service to the ship. The fact that a service to a ship may benefit persons other than the ship does not mean that there is no service to the ship. In the present case there is no doubt that for PTMS to get crew on these ships PTMS had to pay the RCA. Whether characterised as required to be paid under the enterprise agreement or as part of the memorandum of understanding with the unions, the RCA had to be paid. Without it being paid the ships would not have had crew. The service supplied to the ship by PTMS was the provision of crew. The cost of providing that service included the RCA. Again, to seek to apportion out the required payments to get crew on the ship into sub-classes is an exercise outside the scope of s 4(3)(m). Accordingly, the claims in respect of the RCA payments are also properly brought as general maritime claims within s 4(3)(m).
4.3 The RCA otherwise
83 There is another issue about the RCA. It arises from the nature of the RCA and how it was accrued and paid. The RCA was paid in two parts. The first part was paid as part of ordinary salary. The second part was paid on the completion of service by the crew member. The defendants’ point is that the deed operates on and from the Commencement Date of 7 April 2011 and to the extent that the the second part of the RCA accrued from day to day for the performance of services before that date, with merely the payment being deferred until after that date, it must follow that the payment is for services rendered before the commencement of the deed.
84 I disagree with this analysis. First, by the deed Hako (and Boskalis) agreed to pay non-disputed invoices issued by PTMS (cl 5.17). To be within the scope of the deed it is the invoice which must post-date the Commencement Date of the Deed not the services. Second, PTMS did not invoice Hako for the second part of the RCA until the relevant service by that crew member was complete because, under the MOU, that part of the RCA was not payable until that time. The liability to pay did not arise until the time service had been completed. In any event, as I have said, provided the invoice was issued after the Commencement Date and involved charges for the RCA relating to the period when any ship was engaged in relation to the Marine Rock Transport (19 April 2012, for the reasons set out above) then the RCA is claimable under s 4(3)(m). In case there is any ambiguity in this conclusion I should note that nothing in the deed requires invoices to be issued before the Term has expired. Accordingly, invoices issued after the expiry of the Term are still within the scope of the deed provided they relate to services that were provided to the ships up to 19 April 2012.
85 As a result, it is not necessary to resolve a pleading point that PTMS sought to raise. PTMS submitted that it had not appreciated the argument being made about the RCA until the hearing so that, if the defendants were correct, PTMS should be permitted to amend to base its claim on the earlier Marine Manning and Services Agreement. Given that the deed identifies and requires payment of Hako’s total debt to PTMS as accrued under that agreement it is not clear how there could be any such claim but, as I have said, it is not necessary for that to be resolved.
5. AMENDMENT
86 By an interlocutory application PTMS sought leave to amend the writ and statement of claim so as to include alternative bases for its claims so that, to the extent found not to have been supplied under the deed, PTMS could recover pursuant to an implied contract with Hako, a quantum meruit claim, cl 16 of the deed and/or as costs of the arrest.
5.1 The substance of the proposed claims
87 If leave to amend could and should, in the exercise of discretion be granted, I do not consider these proposed bases can support the claims.
88 In respect of the implied contract, as the defendants submitted, the evidence simply does not support the existence of any such contract. PTMS had to prove the existence of the implied contract between it and Hako (by analogy, see Energy World Corporation Ltd v Maurice Hayes and Associates Pty Ltd (2007) 239 ALR 457; [2007] FCAFC 34 at [24]). However, as the defendants submitted:
a) there is no evidence of any request by Hako for the supply of the particular services which the plaintiff seeks to recover on this basis, let alone on the terms contended;
b) even if there was no evidence that any of these services were required by the ships (which there is not), there does not of itself amount to a request by Hako for those services;
c) there is no evidence that Hako accepted those services, or evinced any intention of being bound by any fresh contract with the Plaintiff by reason of the provision of those services or any alleged acceptance;
d) this is especially in circumstances where, in relation to those services provided after the arrest of the ships, the work for which the ships had been contracted by Boskalis had come to an end, the ships had been redelivered by Boskalis and whilst they were under arrest the ships could not be used or employed by Hako;
e) that the Plaintiff raised charges and invoiced Hako for such services provides no basis for concluding that there was a contract or that Hako had entered into any such contract with the Plaintiff. This is especially where those invoices were not paid by Hako and are not the subject of the Plaintiff’s claim in these proceedings. Nor does the fact that this was done without demur by Hako, even if that was the case.
89 I do not consider that the apparent position of Hako, that Hako does not dispute that the services were all supplied under the deed, can be material to this issue. Hako’s position about the deed is nothing more than that. What is being put is that, separate from the deed, there was an agreement between Hako and PTMS that any services supplied by PTMS outside the deed should be paid for by Hako. The evidence cannot support an inference as to the existence of such a contract. It is true that Hako knew that PTMS was still supplying services to the ships after their arrest and after 19 April 2012 but, apart from that knowledge and the fact of the provision of the services (as I have found in the context of PTMS negotiation with the owner of the ships rather than Hako), there is nothing to indicate any agreement with Hako about these matters. The fact that from at least 9 April 2012 onwards PTMS was involved in discussions with the owner for release of the ships from arrest and, as the 17 May 2012 agreement discloses, the provision of services to the ships during their transport to Benoa, points against the existence of any agreement with Hako.
90 I do not accept, moreover, that Hako can be characterised as having “taken the benefit of the work done, goods supplied or services rendered” (Phillips v Ellinson Bros Pty Ltd (1941) 65 CLR 221 at 235). As Dixon J said in Steele v Tardiani (1946) 72 CLR 386 at 402 “‘taking the benefit of the work’ means that the defendant has done so in the exercise of some choice that was actually open to him”. Given that the transport of the ships to Benoa and PTMS providing crew and other services to the ships for that purpose was negotiated and agreed between PTMS and the owner of the ships, with no apparent input from Hako, I cannot see how it can be said that Hako, in contrast to the owner, took the benefit of the work PTMS provided from 20 April 2012 until 17 May 2012 when the agreement with Go Marine was executed. While I accept that Hako was still the bareboat charterer until at least 27 May 2012 when the ships were the subject of the crew change in Benoa, irrespective of the owner’s apparently unexecuted wish to bring the bareboat charter to an end at an earlier time, this fact does not mean that Hako took the benefit of PTMS’s work or had any choice about it. I infer that it was common ground as between the owner and PTMS as at 9 April 2012 that Hako did not have the means to do anything about the arrests and demobilisation of the ships. This is why the owner stepped in and negotiated the release and demobilisation with PTMS. The evidence is inconsistent with the inference that Hako had any substantive role to play in that regard. It did not stand in the owner’s way, but it did not choose for PTMS to continue to provide the services after the Term of the deed had come to an end and pending the entry into the agreement between PTMS and Go Marine on 17 May 2012. It also did not take the benefit of PTMS’s work in that period in any meaningful sense. The owner took that benefit. But no claim is made against the owners other than through the actions in rem under s 18 of the Admiralty Act. Adopting the defendants’ submission in this regard:
…the Defendants dispute that the services in question were to Hako’s benefit. This is especially in respect of those provided after the ships had been arrested, by which time the marine rock transport was at an end, Boskalis had terminated its time charter of the ships, the ships were unable to be used by Hako whilst they remained its time charter of the ships, the ships were unable to be used by Hako whilst they remained under arrest, and there is no evidence that Hako had any other use for them. Indeed, upon their release from arrest, the ships were taken over by their respective owners. Had the ships not been under arrest or released from arrest earlier, this would have undoubtedly been done sooner. The Plaintiff asserts that the services involved such a benefit simply because Hako “would otherwise have had to procure those services elsewhere”. That is assuming that it had a need for those services, which it did not.
91 In respect of the quantum meruit claim, the same considerations also lead to rejection of the claim. I accept the defendants’ submissions as follows:
In those circumstances, there can be no relief of the type now claimed. A gratuitous benefit does not ground a quantum meruit. As the High Court said in Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635 [[2008] HCA 27]at 663, [80]:
[T]he bare fact of conferral of the benefit or provision of the service does not suffice to establish an entitlement to recovery.
The Court emphasised with approval the dictum of Bowen LJ in Falcke v Scottish Imperial Insurance (1886) 34 Ch D 234 at 248:
Liabilities are not to be forced upon people behind their backs any more than you can confer a benefit upon a man against his will.
(see also Lumbers (op cit) at [82] and [86]).
92 In respect of the claim under cl 16 of the deed, the indemnity provision, I do not see how any of the charges claimed (being charges not otherwise claimable) can be characterised as “expenses…caused in whole or part by..[a] breach of [the deed] by Hako” as provided for in cl 16. PTMS’s submissions do not explain how this characterisation might arise. It is one thing that the charges were incurred while the ships were under arrest. It is another to conclude that the charges were caused by Hako breaching the deed. Even if it be accepted that Hako’s breaches of the deed caused the arrests that does not mean that every expense incurred while the ships were under arrest was caused by Hako’s breaches of the deed. As I have found, by 19 April 2012, the material, real or substantial cause of the charges was that PTMS and the owner were still negotiating for the release of the ships from arrest and their transport back to Benoa and, until those negotiations were complete, PTMS (unsurprisingly) would not agree to the release of the ships. By 19 April 2012 Hako’s breaches in not having paid what it was required to do under the deed were nothing more than the cause of the arrests.
93 In respect of the claim as costs of the arrest, PTMS submitted that:
When a vessel is arrested under the Admiralty Act the Marshal has custody of it. The Marshal is obliged to ‘take all appropriate steps to retain safe custody of, and to preserve, the ship’. The Marshal’s costs and expenses in taking such steps are payable by the plaintiff.
…
The situation is that the plaintiff provided the services during the arrest period in the understanding and belief that it was doing so under the Deed. If contrary to that understanding, which it apparently had in common with Hako, those services were not supplied under the Deed, that is because the vessels were under arrest.
In the circumstances, the costs of those services constitute the costs of the custody of the vessels whilst under arrest and should be claimable as costs of the arrest, and hence the proceedings.
94 The defendants responded in these terms:
The costs claimed here are not costs paid by the Plaintiff to the Marshall… They are not the costs of services that were supplied to the Marshal or provided at the request of the Marshal or that “the plaintiff was … required by the Marshal to supply to the vessel”…
Although the Marshal has custody of a ship whilst it is under arrest (r.47(1)) the Marshal does not thereby or otherwise become the employer of or otherwise engage the Master and crew on board the arrested ship during the currency of the arrest: Patrick Stevedores No. 2 v MV “Turakina” (1998) 84 FCR 493 at 502G-503C. The wages of the master and crew of the ship whilst under arrest are not fees or expenses of the Marshal in relation to the arrest (ibid at 502B). That is unless the Marshal has specifically engaged the master and / or crew, which he did not do here.
Further, the costs claimed by the Plaintiff do not become costs of arrest simply because the services referable to those costs might have been provided and those costs that might have been incurred by the plaintiff on some different basis and in different circumstances which would have resulted in them being costs of arrest, but where they were in fact not provided or incurred on that basis or in those circumstances. Rules 41 and 47 do not apply to costs that the Marshal might have incurred or required the Plaintiff to have incurred but did not. Moreover, this is so even if the Plaintiff otherwise incurred those costs on some other basis.
In any event, even if the Plaintiff had chosen to discontinue the supply of services to the ships under arrest, common sense suggests that the Marshal would not have necessarily approached the Plaintiff in the first instance either to provide the services or provide the Marshal with funds to pay for those services. Rather, it is submitted that the Marshal would have approached the owners, operators or managers of ship in the first instance. Had the Defendants been approached in the present case, it would have provided a crew…
95 There is no indication in the evidence that the Marshal required PTMS to continue to crew the ships. On 16 April 2012 the Marshal advised the solicitor for PTMS that the solicitor should “ensure your client is aware that the number of crew on each vessel must not drop below the minimum safe manning”. This is in a context where PTMS had maintained crew on the ships and had not given the Marshal any indication that it intended to do otherwise. The Marshal’s position resulted in another email from PTMS’s solicitor noting that PTMS had maintained the crew of the ships since the arrests and asked that the manning levels be permitted to be reduced to save costs. The Marshal responded to the effect that the issue would be considered but probably would have to go before a Judge. The Marshal then consulted with the Dampier Port Authority who said that they would be guided by the flag state. The Marshal informed the solicitors for PTMS of this advice. Liana D’Ascanio, the solicitor for PTMS, then had a telephone conversation with the Marshal in which she asked what would happen if PTMS stopped providing the crew and provisioning the ships. The Marshal responded:
It is the Court’s preference that PTMS continues the manning and provisioning of the vessels under arrest. But if PTMS did step out, the Admiralty Marshal would retain another agency and would invoice the costs to PTMS in any event. Either way, PTMS would have to pay for these costs.
96 Subsequently, the Marshal agreed to a reduction of the manning levels on the ships.
97 It is not apparent from these circumstances that the Marshal incurred the costs and expenses of the crewing and provisioning of the ships while under arrest within the meaning of r 41. For the reasons set out in the defendants’ submissions this proposed claim could not be accepted.
5.2 Power and discretion
98 The discussion above discloses my conclusion that the proposed amendments, if permitted, would not succeed. Apart from that, the defendants submitted that there is no power to permit the amendments by reason of the terms of s 18 of the Admiralty Act or, if there is power, the amendments should be refused in the exercise of discretion.
99 Section 18 provides that:
Where, in relation to a maritime claim concerning a ship, a relevant person:
(a) was, when the cause of action arose, the owner or charterer, or in possession or control, of the ship; and
(b) is, when the proceeding is commenced, a demise charterer of the ship;
a proceeding on the claim may be commenced as an action in rem against the ship.
100 The defendants’ arguments about lack of power involve the following propositions: - (i) the writ in its current form made claims under ss 15 and 18 of the Admiralty Act, but the proceedings as constituted involve s 18 only, (ii) the claim under s 18 is framed by reference to the deed and the deed alone, the sole cause of action thus being one in contract, (iii) the proposed claims raise new causes of action, (iv) within s 18, Hako is the “relevant person” who was when the cause of action arose the demise charterer of the ships, (v) s 18 then permits the action in rem against the ships in respect of the liability of Hako, (vi) Hako is no longer the demise charterer of the ships, (vii) accordingly, if PTMS now wished to proceed with fresh actions in rem against the ships based on Hako’s liability under the new causes of action PTMS could not do so, (viii) s 18 should be construed consistently so that, on any proposed addition of a new cause of action, the relevant person at the time of the making of the claim based on the new cause of action must be the owner or demise charterer of the ship, and (ix) this approach is consistent with the reasoning of Rares J in EMAS Offshore Pte Ltd v The Ship ‘APC Aussie 1’ (2009) 258 ALR 454; [2009] FCA 872 (EMAS).
101 The defendants’ arguments about discretion involve the same considerations, the defendants submitting that:
the effect of the amendment would be to expose the property of a person other than the person who is alleged to be liable for that claim to recovery of that claim in circumstances where that property would not be so liable if fresh in rem proceedings were to be now commenced in respect of the proposed alternate claims…
102 The defendants’ arguments about discretion are persuasive. If it be accepted that a writ is amenable to amendment under r 8.21 of the Federal Court Rules 2011 (which permits amendment of an originating application, amongst other things, to introduce a new foundation in law for a claim for relief arising out of the same or substantially the same facts even if the application is made after the expiry of any relevant limitation period), the force of the defendants’ submission nevertheless remains. The action in rem was possible because PTMS alleged that Hako was liable and Hako was the demise charterer of the ships at the time the proceedings were commenced. Hako has not been the demise charterer of the ships since mid-2012. If s 18 is not to be construed as the defendants suggest then, nevertheless, to permit amendments as proposed in such circumstances is difficult to reconcile with the scope of s 18 and the limitations it places upon actions in rem. This is consistent with the reasoning in EMAS in which Rares J at [33] said:
There are substantial policy reasons why the Admiralty Act provides in s 18 only limited circumstances jurisdiction to arrest vessels under a demise charter so as to hold the demise charterer liable as a relevant person. That jurisdiction should be exercised carefully, especially where the arresting party seeks to expand it after a vessel has been arrested and the identity of the relevant person or persons may have changed. The court should be cautious to allow an amendment if there has been a change in the vessel’s ownership or the person in possession, subsequent to the arrest and the proposed amendment seeks to add to the writ, against the previous owner or previous demise charterer (as a relevant person), a substantial new and substantively different cause of action that could not be made in fresh proceedings if brought at the time of the amendment application.
103 I do not find the arguments of PTMS in support of an exercise of discretion in its favour persuasive. The flexibility which the submissions for PTMS stressed in r 8.21 is not reflected in s 18 of the Admiralty Act which imposes jurisdictional limits by reference to the status of the relevant person both at the time the cause of action arose and when the proceeding is commenced. It is true that the charges are the same but the causes of action are different and involve different, or at least additional, facts. It is also true that the owner of the ships own shares in Hako but that does not mean that the owner and Hako are one and the same or even closely associated. I accept also that it is possible that a demise charter may end after issue of a writ and before arrest thereby leaving an owner without recourse against the demise charter. And I accept that the action is against the res, the ships, rather than the owners, albeit as was also said “if the party who files a notice of appearance is a relevant person, the consequence is that…the action proceeds as if it were an action in personam (without ceasing to be an action in rem) against that person” (Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45; [2006] FCAFC 192 at [109]). But none of this changes the scope of s 18 and the limitations which it imposes which, even if not construed as the defendants suggest, nevertheless weigh against granting leave to amend in the present circumstances.
104 In respect of s 18 and the issue of power, I accept that s 18(b) specifies the requirement as “when the proceeding is commenced”. I accept also that nothing in s 18 refers to causes of action. The requirement for causes of action to be identified in the writ springs from r 19 of the Admiralty Rules 1988 which provides that a “proceeding commenced as an action in rem must be commenced by writ in accordance with Form 6”. Form 6, the form of the writ, in footnote 5 (referring to the particulars of the claim) states “give enough short particulars of the claim to identify the cause of action”. Jurisdiction is to be determined by the terms of s 18 not the rules or forms. Nevertheless, the proceeding which is commenced under s 18 is a “proceeding on the claim”, the claim being a maritime claim in accordance with s 4. This is important to the opinions expressed by Rares J in EMAS at [26]-[32] about the scope of s 18. For my part while I accept that there is room for debate about the scope of “the claim” and thus the “proceeding on the claim” within the meaning of s 18, I consider that the temporal requirement should be understood as “when the proceeding [on the claim] is commenced”. This suggests that the addition of new claims must also satisfy the requirements of s 18. I prefer not to express any concluded view on this issue, however, given the other conclusions reached which indicate that leave to amend should not be granted to the extent to which the defendants take objection (noting that the defendants consent to certain other minor amendments).
105 I should also record that the same conclusions apply to the application by PTMS for leave to file a reply raising the same issues as set out in the proposed amended writ and statement of claim. Leave to rely on the proposed reply, to the extent to which objection has been taken to it, should also be refused.
6. CONCLUSIONS
106 My conclusions may be summarised as follows:
(1) The Term of the deed in cl 3 should be construed by reference, in particular, to cl 4. Accordingly, the Term expired when the last of the ships, being the Hako Vessels as defined in the deed, was no longer engaged in relation to the Marine Rock Transport.
(2) On the facts of the present case the last of the ships was no longer engaged in relation to the Marine Rock Transport after the barge was released from the Hako Endeavour on 19 April 2012.
(3) Costs and expenses of PTMS in providing services to the ships after 19 April 2012 are not recoverable pursuant to the deed.
(4) The defendants are not estopped from asserting that the classes of costs underlying the claims identified are not general maritime claims.
(5) The services in dispute were services supplied to the ships and, to the extent they relate to the period up to and including 19 April 2012, are within s 4(3)(m) of the Admiralty Act. This includes the RCA provided that the invoice for the RCA was issued after the deed commenced on 7 April 2012 and relates to services up to 19 April 2012.
(6) Leave to amend the writ and statement of claim and to rely on the proposed reply, to the extent to which the defendants object thereto, should be refused.
107 The parties indicated it would be appropriate for them to work out the form of the orders consequential upon my findings and conclusions, including orders for costs. I will make directions accordingly.
I certify that the preceding one hundred and seven (107) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. |
Associate:
Dated: 28 November 2013
