Federal Court of Australia

Viva Energy Australia Pty Ltd v MT “AG Neptune” (No 2) [2022] FCA 533

ORDERS

NOTING the undertakings to the Court comprising exhibit D2 on the application, namely that:

1.    AG Neptune Ltd as bareboat charterer of the MT AG Neptune (Vessel) undertakes that:

(a)    the Vessel will proceed to Gladstone; and

(b)    no point will be taken in this proceeding about the validity of the arrest of the Vessel on account of the Vessel leaving territorial waters; and

2.    OCM Maritime Flyer LLC as the registered owner of the Vessel undertakes not to give any instruction to AG Neptune Ltd, or consent to any request from AG Neptune Ltd, which could lead to or give rise to a breach by AG Neptune Ltd of its undertakings,

THE COURT ORDERS THAT:

1.    Order 1 of the orders of 8 May 2022 be subject to Order 2 below.

2.    The Vessel be permitted, whilst under arrest in the custody of the Admiralty Marshal and proceeding to Gladstone pursuant to Order 1 of the orders of 8 May 2022, to exit the territorial sea following the course identified in annexures “B” and “C” to the affidavit of Michelle Marie Taylor sworn on 9 May 2022 save to such extent as safe navigation may in the Master’s judgement reasonably require.

3.    Costs reserved.

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

REASONS FOR JUDGMENT

(Delivered ex tempore; revised from the transcript)

STEWART J:

1    On Sunday, two days ago, I made orders permitting the MT AG Neptune (vessel) to proceed to Gladstone whilst under arrest, provided that it remain at all times within the territorial sea of Australia: see Viva Energy Australia Pty Ltd v MT “AG Neptune” [2022] FCA 522. That proviso was on the basis that the vessel should remain within the jurisdiction of the Court and the Master said that he had checked his charts and was satisfied that he could take a passage to Gladstone remaining at all times within the territorial sea.

2    Yesterday, ie, Monday, the owner and the demise charterer of the vessel (together, the owners), indicated that they required a variation of the orders so as to allow the vessel to exit the territorial sea for a short while on its approach to Gladstone. The evidence is as follows.

3    On Sunday afternoon, the plaintiff’s solicitors in correspondence to the Admiralty Marshal advised that they were instructed that the vessel would not be able to remain within the territorial sea during the voyage to Gladstone due to navigational hazards, in particular the Breaksea Spit, and restrictions on shipping within the Great Barrier Reef Marine Park.

4    Some correspondence between the parties followed, which ultimately led to the owners’ solicitors advising the Marshal late on Sunday that they had been informed by the Master that he had overlooked the approach to Gladstone, and that he now believes that he will need to navigate outside the 12 nm limit for approximately two hours to avoid running aground in shallow water.

5    Evidence has been tendered before me by way of an admiralty chart as well as a screenshot of the vessel’s Electronic Chart Display and Information System, ECDIS, depicting the vessel’s intended course. The evidence shows that in order to pursue a safe course on the approach to Gladstone it will be necessary for the vessel to exit the territorial sea for a short while as indicated by the Master.

6    The short point is that immediately north of Sandy Cape on Fraser Island, Breaksea Spit extends northwards beyond the limits of the territorial sea. It is not possible for the vessel to navigate over Breaksea Spit. In order to reach Gladstone, the vessel must accordingly leave the territorial sea for a distance of approximately 35nm and then re-enter the territorial sea east of Lady Elliot Island in a designated two-way route.

7    Noting that it has not been argued, for the present I am satisfied that if the vessel leaves the territorial sea, that will not invalidate the arrest or cause the vessel to leave the custody of the Marshal. That is because, at least, the vessel will proceed under and subject to the orders of the Court after it was arrested within the jurisdiction. In that regard, s 22 of the Admiralty Act 1988 (Cth) provides that a ship or other property may be arrested in an action in rem at any place within Australia, including a place within the limits of the territorial sea. There is no provision to the effect that, once arrested, a vessel must remain at all times within the territorial sea in order for the arrest to remain valid.

8    I note, however, that in Tai Shing Maritime CO SA v The Ship “Samsun Veritas” as surrogate for the Ship “Tai Hawk” [2008] FCA 1546 at [15], McKerracher J acknowledged that:

There is a jurisdictional question as to making orders which purport to take effect, in part, beyond territorial waters. 

9    His Honour was not required, and did not seek, to answer that question save to observe that in that case the ship could not stay where it was, nor could it be ordered to be anchored outside the 12 nm zone. His Honour adopted what he described as “the pragmatic approach”, which was clearly motivated, principally, by very real and practical considerations with regard to the safety of the ship.

10    Some of those considerations apply in the present case, although perhaps they are not quite so pressing in that there may be other alternatives such as the vessel proceeding within the territorial sea to Brisbane or Sydney, as discussed in my earlier reasons at [37], or even sailing up and down the coast within the territorial sea whilst under arrest.

11    As against the possibility that there is some point to be taken about the validity of the arrest being jeopardised by the proposed course, the demise charterer has undertaken to the Court that the vessel will proceed to Gladstone and that no point will be taken in the proceedings about the validity of the arrest of the vessel on the account of it leaving territorial waters. Also, the registered owner of the ship has undertaken to the Court not to give any instruction to the demise charterer or to consent to any request from it which would lead to or give rise to a breach by it of those undertakings.

12    In the circumstances, I am satisfied that safe passage to Gladstone requires the variation of the orders that I made on Sunday such as to allow the short deviation beyond the territorial sea. For the reasons canvassed previously, Gladstone remains the preferable destination for the vessel to take on the diesel fuel that it urgently requires.

13    I am also satisfied that the vessel will remain under arrest, and in the custody of the Marshal and subject to the Marshal’s orders, while it proceeds on that course. In that regard, I am fortified by the evident ongoing contact that the Master has with the Marshal, his regular reports to the Marshal and his cooperation. In the circumstances, there would appear to be little risk that the vessel will abscond, and such risk as there may be is not affected by the minor deviation outside the territorial sea. It is also to be observed that since the named relevant persons have entered an unconditional appearance in the in rem action, the Court has personal jurisdiction in respect of them and the action proceeds not only in rem but also in personam: Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad [1976] HCA 65; 136 CLR 529 at 538; Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192 at [109].

14    Finally, I observe that Order 1 made on Sunday provides that once at Gladstone the vessel must remain “there” until further order of the Court. That is, the vessel must remain at Gladstone, and not that it must remain at the first berth, buoy or anchorage at which it ties up.

Associate:

Dated:    10 May 2022