FEDERAL COURT OF AUSTRALIA
NSD 645 of 2020
Date of judgment:
Date of publication of reasons
30 June 2020
PRACTICE AND PROCEDURE – whether inspection orders justified – whether defendants must assist with inspection
PRACTICE AND PROCEDURE – discovery of specified documents sought before statement of claim is filed – whether discovery justified
Federal Court Rules 2011 (Cth) Pt 20, rr 1.40, 14.01, 14.10, 14.11
Uniform Civil Procedure Rules 1999 (Qld) r 250
CGU Insurance Ltd v Malaysia International Shipping Corp Berhad  FCA 1223; 187 ALR 279
CSL Australia Pty Limited v Formosa  NSWCA 363; 235 FLR 273
Cummings v 2KY Broadcasters Pty Ltd (1981) 51 FLR 121; 1 NSWLR 246
Egg and Egg Pulp Marketing Board v K H Korp Tocumal Trading Co Pty Ltd(1963) VR 378
Evan Deakin Pty Ltd v Orekenetics Pty Ltd  QSC 42; 2 Qd R 345
Johnson Tiles Pty Ltd v Esso Australia Ltd  FCA 56; ATPR 41-679
Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 70 FLR 135; 47 ALR 114
Mount Isa Mines Ltd v The Ship “Thor Commander”  FCA 1326; 263 FCR 181
Norm Engineering Pty Ltd v Digga Australia Pty Ltd  FCA 1378
Smith v Peters (1875) LR 20 Eq 511
New South Wales
National Practice Area:
Admiralty and Maritime
Number of paragraphs:
Solicitor for the Plaintiff:
Solicitor for the Defendants:
M Hockaday of Thynne + Macartney
APL CO PTE LTD
CMB OCEAN 13 LEASING CO PTE
DATE OF ORDER:
THE COURT ORDERS THAT:
1. The second and third defendants permit the plaintiff, by its nominated expert, Mike Wilson of TMC Marine, to attend on board the vessel APL ENGLAND (Ship) at Brisbane, Queensland, at a time reasonably convenient to them and within 5 days, to:
(a) be permitted access to, and photograph, the on screen display for the Ship’s engine room alarm log; and
(b) to inspect, photograph, video record, measure any areas of the Ship connected with or relating to the Ship’s main engine and any repairs as the expert sees fit.
2. The second and third defendant identify an appropriately knowledgeable person to accompany Mr Wilson on the inspection referred to in Order 1 and identify at Mr Wilson’s request particular equipment or machinery.
3. On or before 5:00 pm on 16 June 2020, the parties confer regarding the defendants giving discovery of documents as are on the ship or within the jurisdiction and within their possession, custody and power, set out in the attached Annexure.
4. The second and third defendants preserve and keep within this jurisdiction (i) any damaged components of the main engine removed from the Ship during repairs or damage assessment; and (ii) documents from the Ship relevant to the voyage, the cause of the engine stoppage, maintenance of the engine and the cargo securing for the voyage, in accordance with the attached Annexure.
5. The interlocutory application filed on 10 June 2020 is otherwise adjourned to a date to be arranged.
6. Costs reserved.
1. Any Master’s Statement of Facts or note of protest.
2. The Ship’s Telegraph data logger or similar electronic recordings from 23 May 2020 to berthing.
3. The Ship’s Course recorder print out or similar electronic recordings from 23 May 2020 to berthing.
4. The Ship’s Tank sounding Log from 23 May 2020 to berthing.
5. The Ship’s Engine room alarm log print out or similar electronic recordings from 23 May 2020 to berthing.
6. General arrangement plan for the Ship.
7. Tank Capacity Plan for the Ship.
8. Weather forecasts received on board the Ship from 20 May 2020 to berthing.
9. The Ships’s Cargo securing manual, SMS or procedures relating to the securing of cargo and containers.
10. Any communications from the Ship’s Master and Chief Engineer reporting to owners from 23 May 2020 to berthing.
11. Any reports and notices provided to AMSA from 23 May 2020.
12. Maintenance records for cargo securing equipment for the Ship from 1 March 2019.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1 Early in the morning of 24 May 2020, the Singapore flagged, 5,510 TEU capacity containership APL England reportedly experienced a temporary loss of propulsion in heavy seas about 40 nautical miles south of Sydney. The vessel was en route from Ningbo, China, to Melbourne carrying, amongst many others, 754 containers for the plaintiff as slot charterer.
2 As a result of losing propulsion, the vessel reportedly pitched and rolled heavily which in turn caused the collapse of one or more container stacks on deck. As many as 40 containers were lost overboard and many others were damaged, some of them hanging precariously over the ship’s rail. Of the containers being carried for the plaintiff, 33 were reportedly lost or damaged.
3 When propulsion was restored, the vessel proceeded northwards to avoid heavy seas. She ultimately docked in Brisbane where investigations into the cause of the incident were undertaken, as was the challenging operation of discharging the collapsed stacks of containers.
The plaintiff’s claim
4 By originating application filed on 10 June 2020, the plaintiff commenced proceedings against the defendants seeking an indemnity for any liability that it has to third party cargo claimants whose goods were lost or damaged in the incident.
5 The basis for the plaintiff’s claim is set out in a concise statement. It includes the following averments.
6 On or about 7 September 2017, the plaintiff (OOCL), the first defendant (ANL Singapore Pty Ltd) and COSCO Container Lines Co Ltd entered into an Asia Australia Consortium (A3) Joint Service Agreement. The agreement includes a framework for the parties’ cooperation in respect of three weekly fixed day services for the carriage of containers in the Asia – Australia region, i.e. on pre-defined ‘Loops’ between ports in China, Hong Kong, Taiwan and Australia. The agreement was varied by an Addendum No. 1 executed in 2018.
7 One of the vessels deployed by ANL under the agreement is the APL England.
8 The second defendant, APL Co Pty Ltd, is the bareboat charterer of the vessel. The third defendant, CMB Ocean 13 Leasing Co Pty Ltd, is the registered owner.
9 Clause 10.1 of the agreement sets out a “Liabilities Regime” and incorporates a Cross Slot Charterparty as appendix VI to the agreement.
10 The Charterparty provides in cl 11.1 that ANL is responsible for the seaworthiness of the ships it deploys in accordance with Art III, r 1 and Art IV, r 1 of the Hague Visby Rules. Under cl 11.2, ANL is responsible for the proper and careful carriage, custody and care of goods whilst on board the ships it deploys.
11 OOCL issued sea waybills as contracting carrier in respect of the 754 containers that it booked to be carried on the vessel for the voyage in question. The sea waybills were issued to, or on the instruction of, OOCL’s customers. The containers were destined for various Australian ports.
12 Following the incident, OOCL has received notification of claims from, or on behalf of, owners of cargo and/or OOCL’s customers (i.e. presumably shippers and/or consignees) in respect of goods in containers that are said to be lost or damaged, including claims arising from delay. OOCL says that it will suffer damage in the form of its liability to such cargo claimants, as well as a result of damage to or loss of a number of containers (presumably owned or leased by it) and for transshipment costs in respect of containers discharged in Brisbane but destined for other Australian ports.
Urgent interlocutory relief
13 By interlocutory application filed simultaneously with its originating application and concise statement, OOCL sought detailed urgent interlocutory orders that may be summarised as follows:
(1) pursuant to Pt 20 of the Federal Court Rules 2011 (Cth), the urgent discovery of certain listed documents;
(2) presumably pursuant to r 14.11 of the Rules, the preservation of (i) damaged components of the vessel removed from it during repairs or the assessment of damage to it, and (ii) documents relevant to the voyage, the cause of the engine stoppage and maintenance of the engine;
(3) pursuant to r 14.01 of the Rules, access to the vessel by OOCL’s nominated marine surveyor and solicitors to (i) investigate the circumstances of the loss, (ii) inquire into measures that were taken on board to mitigate the results of the loss of power, (iii) investigate any repairs to the vessel’s main engine since the incident, (iv) inspect and photograph any areas of the vessel related to the main engine and any repairs and to take samples of lube oil, and (v) as an alternative to discovery, inspect and copy the listed documents; and
(4) that the defendants give all reasonable assistance to OOCL’s surveyor and solicitors, including the provision of information, documents, correspondence, emails and ship’s records (including computer records, logbooks and other records) and access to any part of the vessel and cargo reasonably requested, with a provision for the maintenance of any claim for privilege.
14 On 11 June 2020, after hearing the parties, I made orders that differed from the orders originally sought. These are my reasons for doing so.
15 OOCL relied on the affidavit of its solicitor, Joseph Alan Hurley, who deposed that:
(1) OOCL’s appointed cargo surveyor had been allowed to attend on board the vessel in Brisbane, but his access had been restricted which meant that there was a limit to what he was able to investigate, and he had only had a cursory look at the engine room.
(2) Certain of the vessel’s records had been furnished including the deck logbook, bridge movement log, engine logbook, cargo bay plans and photographs of lashing plan on board.
(3) Despite request, the defendants had refused access to the vessel by OOCL’s marine surveyor, Mike Wilson of TMC Marine.
(4) Mr Wilson had informed Mr Hurley that the reported failure of propulsion power caused the vessel to turn broadside to a heavy sea with swells up to 5 m resulting in the vessel rolling excessively, contributing to the failure of cargo lashings and the release of some containers over board.
(5) Mr Wilson had also advised that the loss of engine propulsion may have been caused by a lack of lubricating oil pressure, inspection of the engine room would likely establish the cause of the loss of propulsion, and automated logging systems in the engine room created the possibility that data would be permanently lost with the passage of time. Access to the engine room for an inspection was accordingly urgently required, i.e. while the vessel was still in Brisbane and before sufficient time passed to cause any automated data to be overwritten.
16 Before me on 11 June 2020, after discussions had taken place between the parties, OOCL furnished proposed amended orders seeking the following more restricted relief from that foreshadowed in its interlocutory application:
(1) That the defendants permit the plaintiff, by its nominated expert, Mr Wilson, to attend on board the vessel at Brisbane at a time reasonably convenient and within five days to:
(a) investigate the circumstances of the loss of the ship’s main engine power and drifting and rolling on 24 May 2020;
(b) be permitted access to, and photograph, the on-screen display to the vessel’s engine room alarm logs; and
(c) to inspect, photograph, video record, measure any areas of the vessel connected with or relating to the vessel’s main engine and any repairs as the expert sees fit.
(2) That each of the defendants and their employees, officers and servants and agents give all reasonable assistance to Mr Wilson.
(3) That on or before 5:00 pm on 26 June 2020, the defendants give discovery of the documents as are within their possession, custody and power, set out in an attached annexure.
(4) The defendants preserve and keep within the jurisdiction (i) any damaged components of the main engine removed from the vessel during repairs or damage assessment, and (ii) documents relevant to the voyage, the cause of the engine stoppage and maintenance of the engine in the attached annexure.
17 Subject to some minor changes in the wording which were not disputed, the defendants did not contest the order sought for the preservation of the damaged components from the main engine and other documents associated with the voyage. The defendants also did not contest that OOCL’s nominated marine surveyor, Mr Wilson, be permitted to attend on board the ship at a reasonably convenient time to the parties for the purposes of an inspection.
18 The defendants resisted Mr Wilson being given the power to “investigate”, and submitted that Mr Wilson should be given the required access without assistance from the defendants. The defendants also opposed orders for the immediate discovery of the further documents specified in the annexure to the interlocutory application. Instead they sought the opportunity to confer with OOCL with regard to its request for documents.
Inspection of the vessel
19 I indicated that I did not regard there to be any basis to give OOCL’s marine surveyor powers to “investigate” the cause of the vessel’s loss of propulsion power. Rule 14.01 of the Rules makes provision for orders for the inspection of property, the taking of samples, the making of observations of property and processes, the trying of experiments on or with any property, and the copying, transcription or production of documents or other material, data or information. While any one or more of those activities might be undertaken for the purpose of investigating some question, to give, by court order, someone a power to “investigate” a question might easily be misunderstood to authorise activities well beyond those provided for in the rule such as, for example, questioning the officers and crew.
20 Mr Cox SC, who appeared on behalf of OOCL, referred to orders that had been made by Rares J in the case of the Thor Commander in February 2015 which, he understood or recalled, had provided for an expert marine surveyor to attend on board that vessel at Gladstone to “investigate” the cause of a main engine breakdown. No reasons were given for the orders in that case, although the principal judgment following the final hearing in the case some years later is reported as Mount Isa Mines Ltd v The Ship “Thor Commander”  FCA 1326; 263 FCR 181. At , the following is recorded in respect of orders made on 13 February 2015:
I also ordered that MarShip permit Mount Isa’s expert marine surveyor (who, though not named in the orders, was Mr Cosh) to attend on board the ship on 17 February 2015 to inspect, photograph, video and measure in the main engine room space, engine control room and all parts of the main engine, including those parts removed or disassembled (and to take oil samples). I ordered that MarShip’s employees give that surveyor all reasonable assistance to perform those tasks.
21 I have checked the Thor Commander orders of 13 February 2015 which are available to me in the Court’s records. As reported in the above quoted paragraph, they did not provide for the marine surveyor to “investigate”. As reflected there, the orders did, however, require that “each of the defendant and its employees, officers and servants and agents give all reasonable assistance” to the plaintiff’s marine surveyor to undertake the steps that he was authorised to do on board the vessel.
22 In respect of the order requiring the defendants to give “all reasonable assistance” to Mr Wilson, Mr Cox explained that the reason that that was required was because Mr Wilson may not be familiar with particular idiosyncrasies of the equipment and machinery of the vessel and its arrangement such that he may require assistance to identify or locate particular things. The example that was given was where or how the sump oil level and pressure is measured.
23 I did not consider that it is justified to make an order that the surveyor be given “all reasonable assistance”. That is principally because of the ambiguity of that phraseology and the potential for further dispute.
24 In the circumstances, I indicated that I was minded to make a far narrower order such as that which was ultimately agreed to, namely that APL and CMB (being the parties in possession and control of the vessel) identify an appropriately knowledgeable person to accompany the surveyor on his inspection and identify at his request particular equipment or machinery. Mr Hockaday, who appeared for the defendants, ultimately did not oppose such an order and the parties thereafter agreed specific wording.
25 As Allsop P, Basten JA and Handley AJA said in CSL Australia Pty Limited v Formosa  NSWCA 363; 235 FLR 273 at , a working commercial ship is not merely an inanimate structure; while it is property, and capable of being inspected, it is also a working technical and commercial enterprise.
26 The preservation or inspection of evidence after a maritime casualty presents difficulties which individually are not unique but are rarely found together outside of a marine context. A ship must be made safe after a casualty event. This may require processes or activities that affect or alter parts of the ship which may later be evidence in proceedings. Second, a ship may need to continue to operate to safely make port. This may cause crucial evidence such as electronic readouts or logs to change and therefore become unavailable as evidence unless recorded. Third, in the ordinary course a ship will leave the jurisdiction along with the documents and crew and other sources of evidence on board. For these reasons the circumstances of a marine casualty readily lend themselves to orders for the inspection and preservation of evidence pursuant to rr 14.01 and 14.11 of the Rules.
27 A marine surveyor boarding a particular ship for the first time may not have the requisite knowledge to quickly identify equipment (including instruments) or machinery relevant to their investigation. It is necessary for the efficacy of the inspection, and reasonable as being a minor imposition on the defendants, that a person knowledgeable about the ship, such as a crew member from the engine department or a fleet superintendent, accompany the surveyor on the ship to identify particular equipment or machinery as required. As to reasonable and necessary interlocutory orders ancillary to doing ultimate justice between the parties being part of the practice of the court, see Smith v Peters (1875) LR 20 Eq 511 at 513 per Jessel MR.
28 In the matter of Career Step, LLC v TalentMed Pty Ltd  FCA 492, Robertson J dealt with an application under r 14.01 of the Rules filed by the applicant to access the respondent’s computers for the purpose of copying and comparing files which the applicant alleged breached its copyright.
29 Apposite to this matter, the application in TalentMed was heard by the Court before any defence was filed in the proceedings, and the terms of the order sought included that the respondent should actively assist the inspection by either providing, or inputting, passwords to allow the applicant access to its computer systems. The precise term of the order made was that “the respondents provide a computer expert nominated by the applicant … with access to the respondents’ computers (including, as may be required, providing or inputting passwords).” It is implied in such an order that the respondents would, presumably, identify the relevant computers.
30 In TalentMed, Robertson J (at ) concluded that an order for the inspection of the computer systems (and that assistance be provided by the respondent by way of providing access and passwords) was warranted on the basis that, on the material before the Court, the material produced by the inspection would contribute to the resolution of the issues in the matter, and there was sufficient protection for the respondents in the orders made. It was not contended that the Court could not or should not make an order requiring assistance to be provided in accessing the computer systems.
31 His Honour cited with approval the test adopted by Greenwood J in Norm Engineering Pty Ltd v Digga Australia Pty Ltd  FCA 1378 at :
Any question of whether an order should be made is to be assessed against the balancing factors designed to protect the interests of the respondent, the extent of inspection to be allowed, the strength of the applicant’s case and the utility and contribution the order might make, in a balanced way to the resolution of the issues in the matter.
32 In Norm Engineering, Greenwood J extensively cited Evan Deakin Pty Ltd v Orekenetics Pty Ltd  QSC 42; 2 Qd R 345, which dealt with an application under r 250 of the Uniform Civil Procedure Rules 1999 (Qld) for inspection of certain electrostatic separation devices that the plaintiff contended breached its copyright. Chesterman J noted (at 351) that the court, in exercising its discretion, should consider whether in all the circumstances of a particular case, the applicant for inspection has shown sufficient grounds for intruding on the defendant’s property.
33 It is also necessary for the purpose of preserving evidence that might otherwise be lost in the ordinary operation of the ship to permit the surveyor to photograph electronically recorded data such as, in this case, that which appears on the display for the ship’s engine room alarm log. The location of or access to the display of that data might require assistance from a member of the ship’s complement.
34 In my view, in order for the inspection to be successful for the purposes for which it was justified, it was necessary for the relatively minor imposition on the defendants that they make someone available to identify such machinery and equipment as might be required. That was an appropriate balance, and not out of step with the kind of assistance order made in TalentMed which is common in cases involving access to data on electronic devices such as computers and the like.
35 For the above reasons, I made the orders concerning the marine surveyor’s inspection of the vessel.
36 Mr Cox referred to a number of authorities dealing with the providing of discovery before the finalisation of pleadings: Egg and Egg Pulp Marketing Board v K H Korp Tocumal Trading Co Pty Ltd  VR 378 at 381, Cummings v 2KY Broadcasters Pty Ltd (1981) 51 FLR 121; 1 NSWLR 246 at 248-249, Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 70 FLR 135; 47 ALR 114 at 130 and Johnson Tiles Pty Ltd v Esso Australia Ltd  FCA 56; ATPR 41-679 at .
37 OOCL did not seek early discovery in reliance on r 14.01(1)(a)(vi) of the Rules which is a possible source of power for early discovery. Also, since OOCL had already commenced proceedings, the orders that it sought for early discovery could not be categorised as preliminary discovery, as in CGU Insurance Ltd v Malaysia International Shipping Corp Berhad  FCA 1223; 187 ALR 279 or under Div 7.3 of the Rules.
38 In effect, OOCL was seeking orders for limited discovery under r 20.13 of the Rules at an earlier time that what is usually contemplated, a possibility that is provided for by r 1.40, i.e. the Court may at any stage of the proceeding exercise a power mentioned in the Rules on the application of a party.
39 OOCL sought to justify early discovery on two grounds. First, with reference to the cases referred to above, Mr Cox submitted that OOCL was not able to fully and properly particularise its claim until it was able to see the documents that it sought. Also, OOCL has been given notice of possible claims from third parties, as referred to above, and it wishes to be able to assess its position in relation to, and to respond to, those claims. It cannot do that until it has a fuller picture of what caused the incident, which in turn relies on the documents that it seeks.
40 Secondly, OOCL relied on cl 8 of the charterparty which is in the following terms:
8. ACCESS TO LOGS
8.1 The Master and Engineer shall keep full and correct logs and adequate records concerning the care and condition of the containers and the Goods and all logs and records relevant to the Voyage, the containers and the Goods shall be accessible to the Charterer. If the Owner is not the registered owner of the Ship, the Owner shall ensure that such a similar provision is included in the Charterparty or contract between the Owner and the party from whom the Owner charters the Ship and shall use best endeavours to assist the Charterer to obtain all such logs and records.
8.2 The Owner will co-operate with the Charterer to assist them to identify witnesses and obtain statements and other necessary evidence in respect of any incident during the currency of this Charterparty which gives rise to a claim against the Charterer.
41 Thus, it was submitted that ANL, as the disponent owner under the charterparty, was obliged to make all “records relevant to the Voyage, the containers and the Goods … accessible to” OOCL.
42 Mr Cox rightly accepted that there was no particular urgency to the discovery orders which OOCL sought. Also, because of how quickly the interlocutory application was brought on for hearing – urgency that was justified by the inspection orders, the defendants had had little time to consider the list of documents and Mr Hockaday had not been able to take instructions on the defendants’ attitude to giving early discovery of, or making “accessible” to OOCL, some or all of the documents sought. I was also reluctant to impose an obligation on the defendants to discover documents in a short period of time, in particular given that there are already many urgent demands on them arising from the incident. Many of those demands would be deserving of a higher priority than collecting documents together for the purposes of OOCL being able to more fully particularise its claim or respond to third parties. In that regard, it is also to be noted that OOCL had not yet been required to file and serve a statement of claim.
43 In the circumstances, I directed the parties to confer with regard to the early production of documents with a view to reaching agreement. I was confident that the parties’ legal representatives were familiar with the parties’ obligations under ss 37M and 37N of the Federal Court of Australia Act 1979 (Cth), i.e. to conduct the proceeding in a way that is consistent with the overarching purpose of facilitating the just resolution of the dispute as quickly, inexpensively and efficiently as possible, and cls 6.4 and 6.5 of the Admiralty and Maritime Practice Note (A&M1), i.e. to provide information and documentation in a prompt and timely fashion and to meet reasonable requests for documents or information without delay. I nevertheless provided for the opportunity for any remaining disagreement on the question of early access to further documents to be adjudicated the following week if required.
44 The parties later notified my Chambers that they had reached agreement and the matter was not required to be dealt with further. That is to their credit.