Federal Court of Australia

Bhagwan Marine Pty Ltd v The Ship “Teras Bandicoot” [2020] FCA 1224

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 6A of the Admiralty Rules 1988 (Cth), compliance with r 30 of the Rules is waived to the extent necessary to allow service of the originating process lodged together with this application (Writ) to be effected in accordance with these orders.

2.    Pursuant to r 6A of the Rules, compliance with r 43 of the Rules is waived to the extent necessary to allow execution of an arrest warrant issued pursuant to the Application for Arrest Warrant lodged together with the Writ (Arrest Warrant) to be effected in accordance with these orders.

3.    The Admiralty Marshal is directed to serve the Writ together with a copy of these orders by email to ‘francis.wu@ezionholdings.com’.

4.    Service of the Writ will be deemed to have been effected one hour after the email is transmitted subject to the Admiralty Marshal not receiving an undeliverable notification within that time.

5.    The Admiralty Marshal is directed to effect execution of the Arrest Warrant by sending a copy of the Arrest Warrant together with any other documents required by r 43(1A) of the Rules and a copy of these orders by email to ‘francis.wu@ezionholdings.com’.

6.    Execution of the Arrest Warrant will be deemed to have been effected one hour after the email is transmitted subject to the Admiralty Marshal not receiving an undeliverable notification within that time.

7.    Costs of this application be costs in the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

REVISED FROM THE TRANSCRIPT

MCKERRACHER J:

1    In this matter that is brought before the Court urgently today, the plaintiff seeks against the vessel, the Ship Teras Bandicoot, somewhat novel interlocutory relief in relation to service of process. The vessel is moored in Darwin. The Ship has been moored since February 2018, without crew or any other apparent attention.

RELIEF SOUGHT

2    The interlocutory relief which the plaintiff seeks is for orders pursuant to r 6A of the Admiralty Rules 1988 (Cth), that compliance with r 30 be waived to the extent necessary to allow service of the originating process (the writ) lodged in accordance with the orders, and pursuant to r 6A of the Rules, compliance with r 43 be waived to the extent necessary to allow execution of an arrest warrant issued pursuant to the application for arrest warrant lodged together with the writ. That is also to be carried out in accordance with the orders that the Admiralty Marshal be directed to serve the writ, together with a copy of the orders, by email to the address francis.wu@ezionholdings.com. Service of the writ will be deemed to have been effected one hour after the email is transmitted, subject to the Admiralty Marshal not having received an undeliverable notification within that time. The Admiralty Marshal is also directed to effect execution of the arrest warrant by sending a copy of the arrest warrant, together with any other documents required by r 43(1A) and a copy of these orders by email to the same address. Execution of the arrest warrant will also be deemed to have been effected one hour after the email is transmitted, subject to the Admiralty Marshal not having received an undeliverable notification within that time.

3    I am not aware of this form of dispensation having been granted previously, but for the reasons which follow I am satisfied that it is appropriate to make orders in accordance with the interlocutory application in this instance.

THE EVIDENCE

4    The application is supported by two affidavits sworn by Mr Jonathan Wyatt, a solicitor for the plaintiff, who outlines the circumstances giving rise to the arrest and indicates that the claim in respect of which the arrest was sought concerns mooring fees due by the defendant to the plaintiff for the use of the plaintiff’s cyclone mooring. He gives the particulars. The fees have not been paid despite demand. A search of the Registry of Caveats against Arrest has been conducted and there was no such caveat in force against the Ship. A search has also been conducted of the Australian General Shipping Register and title extracts have been produced, indicating that the owner of the Ship is a company described as Teras Maritime Proprietary Limited registered in the Northern Territory. The vessel is valued in the region of $800,000 to $900,000.

5    Mr Wyatt, apart from a matter that I will refer to in a moment, is not aware of any matters that could affect the safety of the Admiralty Marshal, master, crew or any other person, or that relate to the risk of pollution, or damage, or damage to a person, property or the marine environment. But the Ship has remained on the cyclone mooring since February 2018 and is not crewed. To the best of the plaintiff’s knowledge there has been no maintenance undertaken to, or any attendance on, the vessel during the period it has remained on the cyclone mooring.

6    The plaintiff has no first-hand knowledge but understands anecdotally from previous crew comments that an engineer received a shock from one of the generators when it was last operated some years ago, prior to it being placed on the cyclone mooring. In essence the plaintiff does not know what condition the vessel is in. The vessel is in a dead-ship status and has been since shortly after it was placed on the cyclone mooring in or about February 2018. That is to say, its propulsion plant, boilers and auxiliaries have not been in operation due to the absence of power since moored.

7    In a second affidavit, Mr Wyatt deposes to similar facts. The plaintiff does not know the current condition or structural integrity of the Ship; does not know whether the Ship is in a seaworthy state; does not know whether it’s safe to board the Ship; and does not know whether boarding the Ship might give rise to any risk of pollution or damage to the marine environment.

8    The registered office of the company, Teras Maritime, the owner of the Ship, is stipulated as being 31 Muramats Road, East Arm, Northern Territory, which is identified by a satellite photo as appearing to be vacant land apart from a slipway.

9    Mr Wyatt is instructed by the plaintiff that to the best of its relevant officer’s knowledge, the Ship is not operated in Australia, but rather from Singapore, and there are no personnel present in Australia responsible for the Ship. He annexes copies of an email which was sent by Mr Graham, who appears today on behalf of the plaintiff, to Prashant Datt, at the email address prashantdatt@terasoffshore.com, and an attached letter from the plaintiff’s solicitors to Teras Maritime in relation to the claims which are made.

10    He also annexes a response of the following day sent by Mr Francis Wu, from the email address referred to above, to Mr Graham and an attachment responding on behalf of Teras Maritime complaining about the short notice for payment of the amounts demanded, which amounts were not admitted.

11    However, the purpose of annexing those materials is to illustrate the belief on the part of Mr Wyatt that the documents sent to the email address of Mr Wu will be effective to bring the documents to the attention of the owner of the Ship.

CONSIDERATION

12    By the in rem writ which has now been issued, the plaintiff claims unpaid mooring fees on the Ship for the use of the cyclone mooring at Hudson Creek in Darwin in the Northern Territory for a period of time pursuant to an agreement reached and as subsequently amended, or alternatively, damages for breach of that very agreement. The plaintiff has lodged an application for an arrest warrant, together with the writ, seeking the arrest of the Ship as security for the claims the plaintiff makes. Rule 6A of the Rules gives the Court the discretionary power to grant relief from the requirements of the Rules, providing that:

The Court may dispense with compliance with any of the requirements of the Rules, either before or after the occasion for compliance arises.

13    In this instance, dispensation is sought before the occasion. An example of circumstances in which it might be considered appropriate for the Court to exercise the discretion in that Rule was recently outlined in paragraph 2.2 of the Practice Guideline, Special Measures in Response to COVID-19 Admiralty and Maritime (SMIN-2). In this Guideline, practitioners are guided to consider whether it would be appropriate to seek an order that the Court waive compliance with r 43 under r 6A, and direct that service or execution of the arrest warrant be effected by electronic means in circumstances where the Admiralty Marshal may not be able to do so in the conventional manner due to public health, logistical or legislative restrictions.

14    Although that recent Guideline was published in light of considerations which have arisen since the COVID-19 epidemic and in order to draw attention to the procedural flexibility in the context of the impact of COVID-19, the principles underlying r 6A and the matters discussed in the Guideline, in my view, do extend to other circumstances in which it may be appropriate to waive compliance with the Rules in order to address their objects and the safety of persons concerned who might be carrying out obligations under the Rules.

15    Looking at those more specifically, r 30(1) requires that the writ be served by affixing it to a mast, which is not done very often these days, or other conspicuous part of the vessel such as taping it to the bridge.

16    The only alternative to this subrule appears in r 30(3) which provides that if access to the vessel cannot reasonably be obtained, the process may be served on the vessel by leaving it with a person apparently in charge of the vessel.

17    In the case of r 43(1), the Admiralty Marshal is required to execute arrest warrants and, by r 43(2), the warrant is to be executed in the same way as the initiating process is served. Where the in rem proceedings are coupled with a successful application for an arrest warrant, it is usual for the Admiralty Marshal to serve the writ when executing the arrest warrant on the ship in question. Often the documents are taped to the bridge.

18    In these circumstances the plaintiff has submitted it would be more appropriate to waive compliance with r 30 and r 43 to the extent necessary, to allow service of the writ and execution of arrest warrant to be effected in an alternative manner.

19    The reasons for this submission are that the Ship has been moored to the cyclone mooring without crew and in a dead-ship condition with its propulsion plant, boilers and auxiliaries not in operation due to an absence of power now for many months.

20    The plaintiff is unaware of any maintenance to, or attendance on, the Ship in all the time it has been moored and does not know the current condition or structural integrity of the Ship; whether it is in a seaworthy state; whether it is safe to board; or whether boarding might give rise to the risk of pollution or damage to the marine environment.

21    As the Ship is not crewed and is in a dead-ship condition, and has been for many months, there is no apparent practical benefit in boarding the Ship to affix the writ or execute an arrest warrant on-board the vessel if an appropriate alternative is available.

22    Indeed, and perhaps more importantly, as the Ship is not crewed, affixing the writ to a conspicuous place on it, and executing the arrest warrant on-board the Ship, would be unlikely to achieve anything.

23    In particular, it would not, on the face of matters, bring service or execution to the attention of any party, and the fact of that form of execution would, in practicality, need to be communicated to the Ship’s owner separately in another manner in any event.

24    Another consideration is that there is potentially an unknown degree of possible risk to the safety of the Admiralty Marshal in boarding the Ship, given the circumstances which I have described, and perhaps a substantially lesser possibility of risk to the marine environment.

25    A further difficulty is that the owner of the Ship, Teras Maritime, while being incorporated in Australia, has an address comprising a vacant plot of land with no buildings on it except for a slipway. To the plaintiff’s knowledge there are no personnel in Australia representing the owners and the vessel is operated out of Singapore. As a consequence of those factors, the provisions of r 30(3) of the Rules, which provide that if access to the vessel cannot reasonably be obtained, the process be served on the vessel by ‘leaving it’ with a person apparently in charge of the vessel, cannot apply in the usual sense of that language.

26    Notice of intention to bring proceedings and for the arrest of the Ship was given by the letter to which I have referred from the plaintiff’s solicitors sent on 12 August 2020 and it was addressed to Prashant Datt at Teras Maritime. That notice produced a response by letter of 13 August 2020 from francis.wu@ezionholdings.com. Mr Wu’s letter identifies him as being legal counsel of Ezion Holdings Limited, and he signs his correspondence ‘for and on behalf of Teras Maritime Proprietary Limited’.

27    Mr Wu’s letter is on Teras Maritime letterhead and disclosed Teras Maritime’s address in accordance with the address given as Teras Maritime’s registered office, appearing on the historical company extract, followed by an address in Singapore (the Singapore address). With reference to the company extract, Teras Maritime’s sole shareholder is Ezion Investments Pte Limited, which operates from the Singapore address.

28    On the basis of the totality of these matters I am also satisfied that documents served or executed by delivering to Mr Wu’s email address will in all reasonable probability, if not certainty, come to the attention of the owners of the Ship.

29    Perhaps more importantly, serving the writ and executing the warrant on-board the Ship is unlikely to come to the attention of the owner of the Ship as it is not crewed, and therefore alternative service is sought as a more appropriate avenue. No prejudice will be caused to any party by the variation of those orders sought in the plaintiff’s interlocutory application, and in those circumstances I am satisfied that orders in the terms of the application should be made.

CONCLUSION

30    I make the orders as sought with an additional order 7 that the costs of this application be in the proceeding.

Associate:

Dated:    25 August 2020