Federal Court of Australia

JMD Park Pty Ltd v The Ship “Bluefin” [2024] FCA 637

ORDERS

UPON THE UNDERTAKING of the lawyers for the plaintiff dated 16 May 2024 to pay, on demand, to the Marshal an amount equal to the costs and expenses of the Marshal in complying with these orders,

THE COURT ORDERS THAT:

1.    The Marshal is to sell the defendant ship “Bluefin” (Australian Shipping Registration Number 386130) under the Admiralty Rules 1988 (Cth).

2.    The method of sale is to be determined by the court.

3.    The Marshal would be justified in having the ship valued in writing for the purpose of selling the ship.

4.    The Marshal is to engage a shipbroker, experienced in the sale of vessels of a similar nature to the ship, to advise as to the method of sale and to value the ship in writing if the Marshal considers such a valuation is necessary or desirable for the purpose of selling the ship.

5.    As soon as practicable after receipt, the Marshal is to provide to the plaintiff:

(a)    the name of the shipbroker the Marshal proposes to engage to sell the ship; and

(b)    the shipbroker’s recommendations as to the method of selling the ship.

6.    The Marshal is to retain a solicitor experienced in the judicial sale of ships to act on the sale of the ship.

7.    Until further order, the Marshal and the shipbroker are not to disclose any valuation referred to in paragraph 3 to the plaintiff or any other person apart from the Marshal’s delegates or agents.

8.    The costs and expenses incurred in the appraisement, and in the sale of the ship, be paid out of the proceeds of the sale of the ship as part of the Marshal’s costs and expenses in this proceeding.

9.    The parties have liberty to apply for further directions or orders as to the valuation and sale of the ship.

10.    The costs of this application be reserved.

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

REASONS FOR JUDGMENT

SARAH C DERRINGTON J

INTRODUCTION

1    By writ filed 4 April 2024, JMD Park Pty Ltd (the plaintiff) commenced proceedings in rem against the ship “Bluefin” (Australian Shipping Registration Number 386130; IMO: 8000032). On 5 April 2024, the Bluefin was arrested in Brisbane, Queensland by the Admiralty Marshal.

2    The proceedings, and the claim in respect of which the arrest was sought, concern a general maritime claim under s 4(3)(m) of the Admiralty Act 1988 (Cth) for a Debt due and owing for services provided to the Bluefin under a written contract between the plaintiff and the Bluefin’s owner, Mr Dean McDaniels. The plaintiff also claims the costs of the arrest application, the Marshal’s costs, and interest accrued on the Debt.

3    No appearance was entered within the period prescribed by r 23(1) of the Admiralty Rules 1988 (Cth) (or at all) on behalf of the Bluefin. On 16 May 2024, the plaintiff filed an application seeking judicial sale of the Bluefin under the Admiralty Act, and – if deemed necessary by the Marshal – a valuation under r 69(1) of the Admiralty Rules. As part of that application, the plaintiff’s solicitors undertook to pay, on demand, to the Marshal an amount equal to the costs and expenses involved in any sale of the Bluefin: see Admiralty Rules r 69(4).

4    In support of its application, the plaintiff filed written submissions and two affidavits of Ms Julie Cook, Chief Executive Officer of JMD Park, dated 16 May 2024 (Second Cook Affidavit) and 11 June 2024 (Third Cook Affidavit), in addition to her earlier affidavit dated 4 April 2024 (First Cook Affidavit).

5    For the reasons that follow, it is appropriate for the Bluefin to be sold pendente lite, with provision for valuation.

BACKGROUND

6    The Bluefin is an AIS Class A fishing vessel built in 1981, sailing under the flag of Australia. She is 34 metres in length and 10 metres in breadth, with a gross tonnage of 387 tons.

7    The plaintiff operates its business under the name of ‘The Yard’ at 44 Barku Court, Hemmant, Queensland 4174: Second Cook Affidavit. It provides ship berthing facilities, straddle carrier facilities and hardstand services, in addition to other marine logistic services.

8    In January 2024, the plaintiff entered into a ‘Master Services Agreement with Customers’ with Mr McDaniels, on behalf of the Bluefin. Under the Agreement, the plaintiff was to provide the Bluefin with storage services, in the form of hardstand or another storage facility for the vessel, and refit and maintenance services. Clause 6 governs the treatment of fees for services provided to the Bluefin, and stated the plaintiff will invoice the Customer for those fees: cl 6.3. A quote for daily fees was annexed to the Agreement and signed by Mr McDaniels on 25 January 2024.

9    Seven invoices were issued to Mr McDaniels between 31 January 2024 and 29 March 2024. The aggregate amount of the invoices, which comprise the Debt, is $130,046.14. They remain unpaid by Mr McDaniels. Ms Cook deposes to the “repeated requests for payment” made of Mr McDaniels (First Cook Affidavit at [5]), but it is evident that the various and extensive attempts to contact him have been unsuccessful: Third Cook Affidavit at [6]-[7]. Ms Cook deposes that the value of the Bluefin is sufficient to satisfy the Debt: First Cook Affidavit [6].

THE PRESENT CASE

Relevant principles

10    Section 17 of the Admiralty Act confers a right to commence a proceeding on a general maritime claim against an owner of a ship as an action in rem against the ship. Under r 69(1) of the Admiralty Rules, the Court may order that a ship under arrest be valued, valued and sold, or sold without valuation.

11    Prima facie, a Court should not order the sale of a ship pendente lite, whether or not the action is defended, except for good reason: The “Myrto” [1977] 2 Lloyd’s Rep 243, 260; The “Guiseppe di Vittorio” (No 2) [1998] 1 Lloyd’s Rep 661. However, the principles by which the Court will order such a sale pendente lite are well settled (Bhagwan Marine Pty Ltd v The Ship “Teras Bandicoot” (No 2) [2020] FCA 1481 (McKerracher J)) and have been recently restated by Feutrill J in Bank of New Zealand (Security Trustee) v The vessel MY “Island Escape” [2022] FCA 1230 at [23]-[25]. There is no need to repeat them.

Should an order for sale be made?

12    The plaintiff advances four factors to support an order for the sale of the Bluefin.

13    First, there is no appearance by Mr McDaniels or any other intervenor in the proceedings.

14    Secondly, the ongoing storage of the Bluefin has and will continue to prevent the plaintiff from otherwise utilising the storage facility currently occupied by the Bluefin, which is causing financial detriment and ongoing prejudice to the plaintiff’s business. Relevantly, Ms Cook deposes that, based on her review of books and records maintained by the plaintiff, the plaintiff’s daily cost of hardstand storage for the Bluefin is approximately $500: Third Cook Affidavit at [10]. She also observes that “if it were not for the presence of the Ship” the plaintiff could be charging other paying customers for hardstand storage: Third Cook Affidavit at [11].

15    Thirdly, the condition of the Bluefin is deteriorating and, as a result, the value of potential security for the plaintiff’s claim is being run down. Ms Cook similarly deposes to her belief that the “Ship is deteriorating, and may continue to deteriorate in condition, whilst being kept on the hardstand, because the Ship is not being maintained”: Third Cook Affidavit at [12].

16    Fourthly, there is no caveat or other apparent interest in force in respect of the Bluefin from any party, including in relation to the provision of bail: see First Cook Affidavit at [7]. I interpolate that in the absence of any material to the contrary, there is no apparent prospect of any interested person providing bail or other security.

17    The plaintiff has advanced a sufficiently cogent basis for me to be satisfied that it is appropriate to order a judicial sale of the Bluefin, pendente lite.

DISPOSITION

18    Upon the undertaking offered by the lawyers for the plaintiff by its application for judicial sale of the Bluefin, dated 16 May 2024, it is appropriate to order that the Bluefin is to be sold by the Marshal. I will also order that the Marshal engage a shipbroker with relevant experience to advise as to the method of sale and valuation of the Bluefin, if the Marshal considers a valuation necessary or desirable for the purpose of the sale.

19    The costs and expenses incurred in the appraisement, and in the sale of the ship, will be paid out of the proceeds of the sale of the ship as part of the Marshal’s costs and expenses in this proceeding. Otherwise, the costs of the application for sale will be reserved.

Associate:    

Dated:        13 June 2024