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Law Reform Commission Act - Law Reform Commission - Report - No. 33 - Civil Admiralty Jurisdiction


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The Parliament of the Commonwealth of Australia

LAW REFORM COMMISSION

Report No. 33

Civil Admiralty Jurisdiction

Presented 2 December 1986 Ordered to be printed 5 December 1986

Parliamentary Paper No. 351/1986

The Law Reform

Commission

Report No. 33

CIVIL ADMIRALTY JURISDICTION

Publications o f the Law Reform Commission Reports ALRC 1 Complaints Against Police, 1975 ALRC 2 Criminal Investigation, 1975 ALRC 3 Annual Report 1975 ALRC 4 Alcohol, Drugs and Driving, 1976 ALRC 5 Annual Report 1976 ALRC 6 Insolvency: The Regular Payment of Debts, 1977 ALRC 7 Human Tissue Transplants, 1977 ALRC 8 Annual Report 1977 ALRC 9 Complaints Against Police (Supplementary Report), 1978 ALRC 10 Annual Report 1978 ALRC 11 Unfair Publication: Defamation and Privacy, 1979 ALRC 12 Privacy and the Census, 1979 ALRC 13 Annual Report 1979 ALRC 14 Lands Acquisition and Compensation, 1980 ALRC 15 Sentencing of Federal Offenders, 1980 ALRC 16 Insurance Agents and Brokers, 1980, ALRC 17 Annual Report 1980 ALRC 18 Child Welfare, 1981 ALRC 19 Annual Report 1981 ALRC 20 Insurance Contracts, 1982 ALRC 21 Annual Report 1982 ALRC 22 Privacy, 1983 ALRC 23 Annual Report 1983 ALRC 24 Foreign State Immunity, 1984 ALRC 25 Annual Report 1984 ALRC 26 Evidence, 1985 ALRC 27 Standing in Public Interest Litigation, 1985 ALRC 28 Community Law Reform for the Australian Capital Territory: First Report 1985 ALRC 29 Annual Report 1985 ALRC 30 Domestic Violence, 1986 ALRC 31 The Recognition of Aboriginal Customary Laws, 1986 ALRC 32 Community Law Reform for the Australian Capital Territory: Second Report 1986 Issues Papers

IP 1 Statutory Brain Death, 1977 IP 2 Insurance Contracts, 1977 IP 3 Evidence, 1980 IP 4 Reform of Contempt Law, 1984

IP 5 Service and Execution of Process, 1984 IP 6 General Insolvency Inquiry, 1985 Discussion Papers DP 1 Defamation — Options for Reform, 1977 DP 2 Privacy and Publication — Proposals for Protection, 1977 DP 3 Defamation and Publication Privacy — a Draft Uniform Bill, 1977 DP 4 Access to the Courts — I Standing: Public Interest Suits, 1978 DP 5 Lands Acquisition Law: Reform Proposals, 1978 DP 6 Debt Recovery and Insolvency, 1978 DP 7 Insurance Contracts, 1978 DP 8 Privacy and the Census, 1979 DP 9 Child Welfare — Children in Trouble, 1979 DP 10 Sentencing: Reform Options, 1979 DP 11 Access to the Courts — II Class Actions, 1979 DP 12 Child Welfare: Child Abuse and Day Care, 1980 DP 13 Privacy and Intrusions, 1980 DP 14 Privacy and Personal Information, 1980 DP 15 Sentencing of Federal Offenders, 1980 DP 16 Reform of Evidence Law, 1980 DP 17 Aboriginal Customary Law — Recognition? 1980 DP 18 Aboriginal Customary Law — Marriage, Children and the Distribution of Property, 1982 DP 19 Foreign State Immunity, 1983 DP 20 Aboriginal Customary Law — The Criminal Law, Evidence and Procedure, 1984 DP21 Admiralty Jurisdiction, 1984 DP 22 Matrimonial Property Law, 1985 DP 23 Evidence Law Reform Stage 2, 1985 DP 24 Contempt and Family Law, 1985 DP 25 Criminal Records, 1985 DP 26 Contempt and the Media, 1986 DP27 Contempt: Disruption, Disobedience and Deliberate Interference, 1986 Digest The Law Reform Digest 1910-1980, 1983 The Law Reform Digest 1981-1985, 1985

Periodicals Reform (Quarterly)

The Law Reform

Commission

Report No 33

CIVIL ADMIRALTY JURISDICTION

Australian Government Publishing Service Canberra 1986

T h is Report reflects the law as at 1 Jan u ary 1986

© Commonwealth o f A ustralia 1986

ISBN 0 644 01354 0

Commission Reference: ALRC 33

The Law Reform Commission is established by section 5 of the Law Reform Commission Act 1973 for the purpose of promoting the review, modernisation and simplification of the law. The first Chairman and Members were appointed in 1975. The offices of the Commission are at 99 Elizabeth Street, Sydney. NSW. Australia (Tel 02 231 1733) and Royal Insurance Building, 25 London Circuit, Canberra. ACT. Australia (Tel 062 47 2166).

Printed in Australia by Aiken Press P/L Smithfield

Contents

Paragraph

Terms of Reference Participants Summary

PART 1 - INTRODUCTION

1. Introduction The Terms of Reference 1

Consultation on the Reference 2

The Commission’s Consultative Papers 3

Public Meetings and Other Discussions of the Commission’s Proposals Overseas Developments The Need for Reform Criminal Admiralty Jurisdiction and Prize

PART II - CIVIL ADMIRALTY JURISDICTION: THE PRESENT LAW

2. The Development of Admiralty Jurisdiction The Relevance of History 8

The Development of English Admiralty The Early English History 9

Bitter Jurisdictional Conflicts 10

The Admiralty Court Acts, 1840 and 1861 11

Subsequent Restatements and Additions 12

Courts Exercising Admiralty Jurisdiction in England 13

Nature of the Action In Rem 14

Statutory Rights of Action In Rem 15

Relevance of the Distinction between Maritime Liens and Statutory Rights of Action In Rem 16

The Personification and Procedural Theories 17

Developments in Australia Vice Admiralty Courts 18

The Vice Admiralty Courts Act 1863 (UK) 19

The Colonial Courts of Admiralty Act 1890 (UK) 20

Application of the 1890 Act in Australia 21

Other Commonwealth Countries Replacement of 1890 Act by Local Statutes 22

3. Australian Courts Exercising Admiralty Jurisdiction Original Civil Jurisdiction Colonial Courts of Admiralty 23

The Meaning o f ‘British Possession’ 24

Original Unlimited Civil Jurisdiction’ 25

The Effect of a Declaration under Section 3 26

The Statute of Westminster 1931 (UK) 27

^ O ' U i i v

iv / Civil Admiralty Jurisdiction

Paragraph

Inferior Courts exercising Admiralty Jurisdiction 28

Appellate Jurisdiction Local Appeals 29

Appeals to the Privy Council 30

The Effect of the Judiciary Act 1903 (Cth) s 39 A Coexisting Federal Jurisdiction? 31

Consequences of Concurrent Federal Jurisdiction 32

Unresolved Issues 33

Summary The Present Position 34

4. The Present Scope of Admiralty Jurisdiction in Australia Introduction 35

The Effect of Section 2(2) of the 1890 Act 36

The Scope of Civil Admiralty Jurisdiction The Territorial Scope of Admiralty Jurisdiction 37

Existing Heads of Admiralty Jurisdiction 38

Statutory Jurisdiction as at 1890 Ship Mortgages 39

Claims for the Building, Equipping or Repairing of a Ship 40

Necessaries 41

Damage to Cargo 42

Damage Done to or by a Ship 43

Master’s and Seamen's Wages and Master’s Disbursements 44

Salvage 45

Towage and Pilotage 46

Title, Ownership and Disputes between Co-owners 47

Inherent Jurisdiction Certain Maritime Contracts 48

Certain Torts at Sea 49

Bottomry and Respondentia Bonds 50

Wreck at Sea 51

Master’s Claims for Unpaid Freight 52

Jurisdiction under Later Legislation Miscellaneous Jurisdiction under Other Acts 53

Merchant Shipping Act 1894 (UK) 54

Navigation Act 1912 (Cth) 55

The Ambit of the Navigation Act 1912 (Cth) 56

The Exercise of Admiralty Jurisdiction under the 1890 Act Special Features of the Existing Jurisdiction 57

Relation to Other Jurisdictions 58

The Relevance of ‘International Comity’ 59

Other Sources of Federal Maritime Jurisdiction in Australia Changes in Australian Maritime Legislation 60

Seamen’s Compensation Act 1911 (Cth) 61

Navigation Act 1912 (Cth) 62

Historic Shipwrecks Act 1976 (Cth) 63

Protection of the Sea (Civil Liability) Act 1981 (Cth) 64

Shipping Registration Act 1981 (Cth) 65

Contents / v

Paragraph

5. The Federal Constitution and Admiralty Jurisdiction Substantive and Jurisdictional Powers 66

Federal Power to Confer ‘Admiralty and Maritime Jurisdiction’ The Scope of Section 76(iii) 67

‘Admiralty and Maritime Jurisdiction’ in the United States Constitution 68

Relevance of the United States Position 69

Settled Principles of Australian Constitutional Interpretation 70

Power to Confer Original and Appellate Jurisdiction 71

Specific Constitutional Limitations 72

Incidental Matters (including Procedure) 73

Substantive Federal Legislative Power over Admiralty and Maritime Matters A Range of Powers 74

Interstate and Overseas Trade and Commerce 75

Application to Admiralty Jurisdiction 76

External Affairs 77

Trading, Financial and Foreign Corporations 78

Other Relevant Powers 79

The Relation between Legislative Power and Jurisdiction The Basic Principle 80

Federal Power to Repeal Imperial Admiralty Legislation Applying to Australia 81

Conclusion Comprehensive Federal Power 82

PART III - CIVIL ADMIRALTY JURISDICTION: REFORM

6. Reform of Admiralty Jurisdiction The Need for Reform A Broad Consensus 83

Reform or Abolition of Admiralty? An Unnecessary Jurisdiction? 84

Abolition of Admiralty? 85

Principles of Reform 86

Unique Characteristics of Admiralty Three Distinctive Features 87

An Accepted Jurisdictional Foundation 88

Security for Maritime Claims 89

Priorities in Admiralty 90

Australia’s National Interest . The Need for Balance 91

Foreign Defendants the Primary Concern 92

Domestic Interests 93

International Constraints 94

Overseas Legal Sources 95

Conclusion 96

7. The Subject of Actions In Rem Introduction 97

The Definition of ‘Ship’ The Need for Definition 98

vi / Civil Admiralty Jurisdiction

Paragraph

Vessels Used in Navigation 99

Aircraft and Seaplanes 100

Hovercraft 101

Oil Drilling Rigs 102

The Options 103

Conclusion on Rigs 104

Pleasure Craft 105

Inland Waterways Vessels 106

Equipment, Furniture, Stores, Bunkers 107

Ships Under Construction 108

Cargo, Freight and Other Types of Res Need to Specify Cargo and Freight? 109

Conclusion 110

The Geographical Scope of Admiralty Introduction 111

Service and Arrest of Ships in Motion 112

Service and Arrest in the Territorial Sea 113

Conclusion 114

Inland Waters Claims 115

8. Maritime Liens and Statutory Rights of Action In Rem The Distinction between Jurisdiction and Substantive Law Introduction 116

Scope of this Chapter 117

Terminology 118

Maritime Liens The Present Law of Maritime Liens 119

Characteristics of Maritime Liens 120

The Creation of New Maritime Liens 121

The Treatment of Maritime Liens in the Proposed Legislation 122

Foreign Maritime Liens 123

Statutory Rights In Rem: Extent of Enforceability Identifying the Wrongdoing Ship 124

The Competing Arguments 125

Nexus Between Wrongdoing Ship and In Personam Liability Introduction 126

The Need for Reform? 127

The Options 128

No Action In Rem Without Owner’s In Personam Liability 129

Action In Rem in All Cases Irrespective of Owner’s Liability 130

Action In Rem on Owner’s and Demise Charterer’s Liabilities 131

Action In Rem in Some Cases Only 132

Action In Rem on Charterer’s Liabilities while Charter Subsists 133

Evaluation of the Arguments The Effect of an Extended Right of Action In Rem 134

Views Expressed to the Commission 135

Recommendation 136

Contents / vii

Paragraph

An Alternative View: Time Charterers Operating Ships 137

Lifting the Corporate Veil The Present Position 138

Arguments About Lifting the Corporate Veil 139

Difficulties of Application 140

Conclusion 141

Relation Between Actions In Rem and In Personam The Need to Preserve Admiralty Actions In Personam 142

Effect of Appearance 143

Separate Actions? 144

9. The Scope of Statutory Rights of Action In Rem General Considerations Introduction 145

Overlap Between Heads of Jurisdiction 146

Two Classes of Arrest? 147

Geographical Restrictions 148

Proposed Heads of Jurisdiction: Statutory Rights of Action In Rem Vessel Ownership and Title Disputes 149

Disputes Between Co-owners of Ships 150

Mortgages 151

Effect of Shipping Registration Act 1981 (Cth) 152

Towage 153

Pilotage 154

Salvage 155

Scope of Salvage Jurisdiction 156

Liability Salvage 157

General Average 158

Wages of Masters and Crew Members 159

Definition of Master and Crew Members 160

Allotment of Wages; Recovery on Behalf of Deceased Crew Members 161

Need to Define Wages 162

Relationship to Other Legislation 163

Disbursements 164

Damage Done by a Ship 165

Personal Injury 166

Loss or Damage to Goods Carried in a Ship 167

Agreements for Carriage of Goods by Ship 168

Agreements for the Use or Hire of a Ship 169

Construction, Repair, Alteration or Equipping of a Ship 170

Goods, Materials or Services Supplied to a Ship 171

Other Possible Heads of Jurisdiction Damage Done to a Ship 172

Marine Insurance 173

Dock and Harbour Dues 174

Pollution from Ships 175

Limitation of Liability Actions 176

Forfeiture and Condemnation of a Ship 177

Wreck and Droits of Admiralty 178

viii / Civil Admiralty Jurisdiction

General Tortious Claims Sources of Jurisdiction over Maritime Torts Scope of Inherent Jurisdiction Maritime Torts Not Resulting in Physical Injury Exclusion of Economic Loss? Arguments Against Including Economic Loss Claims Conclusion Maritime Arbitrations and Other Proceedings

Arbitration or Other Proceedings and Admiralty Enforcement of Arbitration Awards Obtaining Security Pending Arbitration or Foreign Court Proceedings

Reform Options The Commission’s View Enforcing Local and Foreign Admiralty Judgments An Action In Rem ?

Extent of Right of Arrest A Residual Head of Jurisdiction? Need For A Residual Clause An Exhaustive List?

Need for Ancillary Jurisdiction Restrictions on Admiralty Actions against Particular Defendants Introduction Exclusion of Jurisdiction over Local Residents?

Collision Cases: Suits In Personam against Foreign Defendants Actions In Rem against the Crown Foreign State Vessels

Paragraph

179 180 181 182 183 184

185 186

187 188 189 190 191 192

193 194 195

196 197

198 199 200

10. Surrogate Ships and Multiple Arrest Introduction Arrest of ‘Surrogate Ships’ Development of Actions In Rem against Surrogate

Ships Permissibility of Proceeding against Other Ships The Definition of Surrogate Ship The Appropriate Nexus Co-ownership Surrogate Ships under Charter Claims not Subject to Actions against

Surrogate Ships Actions In Rem against Other Property: Surrogate Cargo and Freight Multiple Arrest and Rearrest

Multiple Arrest of Ships? Rearrest of the Same Ship ‘Rearrest’ of a Different Ship Arrest after Judgment Procedural Consequences

Commencing Proceedings against Several Ships Amendment of Writs Multiple Service

201

202 203 204 205 206 207

208

209

210 211 212 213

214 215 716

Contents / ix

Paragraph

11. The Allocation of Admiralty Jurisdiction Introduction 217

The Present Australian Position Courts Vested with Admiralty Jurisdiction under the Colonial Courts of Admiralty Act 1890 (UK) 218

The Admiralty Case-Load of Australian Courts 219

Debate on the Allocation of Business between Courts 220

Conclusions From the Debate 221

Overseas Comparisons England and Wales 222

New Zealand 223

United States 224

Canada 225

Constitutional Powers to Allocate Jurisdiction Broad Commonwealth Power 226

Pendent or Ancillary Jurisdiction 227

Associated Claims 228

The Allocation of Jurisdiction Eliminating Certain Options 229

A Separate Australian Admiralty Court? 230

Exclusive Federal Court Jurisdiction? 231

High Court Jurisdiction? 232

Allocating In Personam Admiralty Jurisdiction Proposed Allocation 233

Reasons for Allocation 234

Allocating In Rem Admiralty Jurisdiction among Superior Courts The Issue 235

The Need for a Court with Australia-Wide Jurisdiction 236

Avoiding Demarcation Disputes Between Courts 237

Transfer of Proceedings 238

Conclusion 239

Allocating In Rem Admiralty Jurisdiction to Lower Courts Should In Rem Jurisdiction be Conferred on Lower Courts? 240

Conclusion 241

The Allocation of Appellate Jurisdiction Final Appeals 242

Intermediate Appeals 243

12. Other Related Issues Introduction 244

Arrest and Mareva Injunctions Arrest and Mareva Injunctions Compared 245

Need for Reform? 246

Need for Legislative Provision? 247

In Personam Remedies in Actions In Rem The Issue 248

Time Limits The Present Position 249

International Considerations 250

United Kingdom Reforms 251

x / Civil Admiralty Jurisdiction

Abolition of Special Admiralty Rules Difficulties of Implementation The Salvage and Collision Conventions Limitation Periods Applying to Certain Defendants Ranking of Claims in Admiralty

The Present Position Options for Reform Admiralty Proceedings and Bankruptcy or Insolvency Priorities and Surrogate Ship Arrest Two Main Issues

Priority of Maritime Claim Transferred to Surrogate Ship Effect on Maritime Liens Arrest, Possessory Liens and Statutory Rights of Detention

Introduction Arrest and Possessory Liens Arrest and Statutory Rights of Detention

Reform Pre-Judgment Interest The Present Position Options for Reform

Need for a Head of Jurisdiction Covering Interest Conclusion on Pre-Judgment Interest 13. Relationship of Proposed Legislation to Other Laws Imperial Legislation

Repeal of Imperial Legislation State and Territory Legislation Introduction Curing Possible Invalidity

Adding to Admiralty Jurisdiction Other Forms of Detention of Ships Commonwealth Legislation Navigation Act 1912 (Cth)

Seamen’s Compensation Act 1911 (Cth) Law Maritime and International Law and Comity Need for Express Provision?

Paragraph 252 253 254 255

256 257 258 259 260

261 262

263 264 265 266

267 268 269 270

271

272 273 274 275

276 277

278

PART IV - CIVIL ADMIRALTY JURISDICTION: PROCEDURE AND RULES

14. The Form and Content of Admiralty Rules Introduction 279

Uniform Admiralty Rules The Rules in Force at Present 280

The Need for Uniform Rules 281

The Rule Making Authority 282

The Scope of Uniform Rules 283

Consequential Amendments to Existing Rules 284

Judicial and Administrative Authority Under the Rules The Registrar and Marshal 285

Appointment of Admiralty Officials 286

Assessment of Damages and Other Ancillary Powers of Registrars 287

Contents / xi

Paragraph

Nautical Assessors Nautical Assessors: England 288

Use of Nautical Assessors in Other Countries 289

Nautical Assessors in Australia 290

Retention of Nautical Assessors? 291

Maintenance of Registers Registers Generally 292

Caveat Registers 293

Miscellaneous Procedural Issues Mode of Trial 294

Preliminary Acts 295

Retention of Preliminary Acts 296

Extension to Other Cases 297

Notice to Consul when Arresting Foreign Ship 298

Limitation Proceedings 299

Caveats Against Arrest 300

Frivolous and Vexatious Arrest Present Position 301

The Need for Reform 302

Excessive Security; Refusal to Release 303

Conclusion 304

Page

Appendix A Draft Legislation 261

Appendix B List of Written Submissions 339

Table of Cases 342

Table of Legislation 381

Bibliography 388

Index

xii / Civil Admiralty Jurisdiction

Terms of Reference

I, NEIL ANTHONY BROWN, the Minister of State for Communications, acting for and on behalf of the Attorney-General of the Commonwealth of Australia, HAVING RE­ GARD TO THE FOLLOWING: (a) that the Admiralty jurisdiction in Australia is at present still exercised pursuant to

the United Kingdom Colonial Courts of Admiralty Act, 1890; (b) that the Constitution enables the Commonwealth Parliament to make laws con­ ferring jurisdiction on the High Court and other federal courts in matters of Ad­ miralty and maritime jurisdiction, and to make laws investing any court of a

State or Territory with such jurisdiction; and (c) the other countries, including Canada and New Zealand, to which the Colonial Courts of Admiralty Act, 1890 previously applied, have enacted their own Ad­ miralty legislation in a revised and updated form; HEREBY REFER to the Law Reform Commission, for INQUIRY, REVIEW and RE­ PORT thereon to the Attorney-General, all aspects of the Admiralty jurisdiction in Aus­ tralia, and REQUEST the Law Reform Commission, in considering this reference, (a) to have regard to the Report of the Joint Committee of the Law Council of Australia and the Maritime Law Association of Australia and New Zealand dated 22 April 1982 on Ad­ miralty Jurisdiction in Australia, and (b) to take note of the draft Admiralty Jurisdiction

Bill set out as Appendix “A” to that Report, and, in particular, to (i) make recommendations on the provisions to be included in an Australian Admir­ alty Act; (ii) consider whether any, and if so what, consequential amendments should be made

to other Commonwealth legislation, including the Navigation Act 1912; (iii) formulate draft Rules of Court for possible application by courts upon which Ad­ miralty jurisdiction may be conferred by the Admiralty Act as recommended by the Commission; (iv) consider whether Australia should enact its own law of Prize and, if so, formulate

recommendations for such a law; and (v) to formulate a draft Explanatory Memorandum that could be used as an aid in the interpretation of any Bill for an Act to give effect to recommendations by the Commission pursuant to these Terms of Reference.

23 November 1982

Participants / xiii

Participants

The Commission For the purpose of the Reference, the President in accordance with s 27(1) of the Law Reform Commission Act 1973 created a Division comprising the following members of the Commission.

President The Hon Justice MD Kirby, BA, LLM, BEc (Syd) (resigned 1984) The Hon Justice MR Wilcox, LLB (Syd) (Acting Chairman, 1984) The Hon Xavier Connor QC, LLB (Melb) 1985 Commissioner in Charge

Professor JR Crawford, BA, LLB (Adel), DPhil (Oxon)

Commissioners Sir Maurice Byers, CBE, QC (resigned, December 1985) The Hon Justice EM Neasey, LLB (Tas) (retired, October 1984) Professor MC Pryles, LLB (Melb), LLM, SJD (SMU), LLD (Melb) The Hon Justice DM Ryan, QC, BA, LLB (Hons) (Melb)

Mr T Simos, QC, BA, LLB (Syd), LLM (Harv), MLitt (Oxon)

Officers of the Commission

Secretary and Director of Research Mr IG Cunliffe, BA, LLB (ANU) Mr Stephen Mason, BA, LLB, MTCP (Syd) (1986) Legislative Draftsman

Mr Stephen Mason, BA, LLB, MTCP (Syd)

The legislation set out in Appendix A was settled in collaboration with Mr JQ Ewens, QC, CMG, CBE, LLB (Adel), formerly First Parliamentary Counsel.

Research Dr D Cremean, LLB (Melb), D Phil (Monash), Senior Law Reform Officer (to De­ cember 1983) S Curran, BA (Macq), LLB (NSW), Dip Int L (ANU), Senior Law Reform Officer (to January 1985)

V Thompson, LLB (Adel), Law Reform Officer (from February 1985)

Principal Executive Officer Mr Barry Hunt, BA (Syd)

Library Ms Virginia Pursell, BA (NSW), Dip Lib (CCAE), Librarian

Word Processing Mrs Jennifer Clark Mrs Anna Hayduk Miss Amanda Seeley

xiv / Civil Admiralty Jurisdiction

Consultants to the Commission * Mr MR Blair, President, The Australian Shippers’ Council Captain KT Butterworth, Director of Naval Legal Services, RAN Mr R Cooper QC, Barrister, Brisbane Mr PA Cornford, Crown Law Office, Wellington, New Zealand Hon Justice KJ Carruthers, Supreme Court of NSW Dr DJ Cremean, Barrister, Victoria Ms M Calder, Solicitor, Sydney Mr RD Desmond, Solicitor, Middletons, Oswald, Burt & Co, Vic Mr PG Foss, Lawyer, Stone James Stephen Jaques, WA Mr MA Hill, General Manager, Associated Marine Insurers Aust Pty Ltd Mr P Holmes, Department of Transport, Canberra Professor DHN Johnson, Professor of Law, University of Sydney Captain P Klausen, Company of Master Mariners of Aust, Sydney Mr GJ Lindell, Senior Lecturer in Law, Australian National University (resigned De­ cember 1984)

Mr B Makins, Nominee of the Australian Chamber of Shipping Mr R Muecke, Attorney-General’s Department, Canberra Mr CW O’Hare, General Counsel, Export Finance and Insurance Corporation Assoc Prof D Roebuck, Law School, University of Papua New Guinea

Mr AT Scotford, Solicitor, Ebsworth and Ebsworth, Sydney Mr P Shannon, Department of Foreign Affairs, Canberra Professor IA Shearer, Professor of Law, University of NSW Hon Justice IF Sheppard, Federal Court of Australia Persons Nominated by State/Territory Governments *

Mr BM Selway, Crown Solicitor, South Australia Mr KC O’Connor, Department of Attorney-General for Victoria Mr KJ Martin, Department for Justice and Attorney-General, Queensland Dr JA Thomson, Western Australian Crown Law Department Mr Dallas Booth, Department of the Attorney-General for New South Wales Mr I Hemming, Tasmanian Law Department

The recommendations in the report and statements o f opinion and conclusion are necessarily those of the Members of the Law Reform Commission alone. They may not be shared by the consultants or nominees nor by the departments or organisations with which they are associated.

Summary

The Development of Admiralty

Admiralty jurisdiction has a long history, dating back to 14th century England. In its modern form it is a distinctive jurisdiction with respect to a wide range of shipping and maritime disputes. The key feature of admiralty is the action in rem, which allows civil jurisdiction to be asserted over disputes, wherever arising, involving a ship. This jurisdic­

tion is predicated mainly upon service of process on the ship, and can be backed up by arrest of the ship by the court, with the subsequent sale of the ship providing a fund from which claims can be met. As a result of developments in England from the 17th to the 19th century, two classes of in rem action came to be recognised: those based on a limited number of maritime liens (eg salvage, wages, collision damage) and those based on a much wider category of claims in contract or tort involving the operation of ships (eg goods supplied to a ship, cargo claims). The expansion of admiralty jurisdiction over the latter class of claims was brought about by legislation in the 19th and 20th century, and this process has been expanded through international developments (especially the 1952

Brussels Convention on the Arrest of Sea-Going Ships, a Convention that is itself now undergoing revision) and through further legislative expansion and development in coun­ tries such as the United Kingdom (1956, 1981), Canada (1970), New Zealand (1973) and South Africa (1983).

The Need for Reform

Further development of admiralty jurisdiction along these lines in Australia was pre­ vented by the Colonial Courts of Admiralty Act 1890 (UK), a paramount force statute applying to Australia and limiting admiralty jurisdiction to matters within the admiralty jurisdiction in England in 1890. As a result there are many obscurities and uncertainties

about the scope of the jurisdiction in Australia, even about its distribution among the various courts, and there are many unjustified limitations as to the subject matter of the jurisdiction. All are agreed on the need for reform. The Commonwealth Parliament has sufficient power, under s 76(iii) of the Constitution (which deals with matters ‘of Admir­

alty and maritime jurisdiction’) and otherwise, to carry out such reform: it can confer ‘Admiralty and maritime jurisdiction’ on appropriate Australian courts and regulate the exercise of that jurisdiction in appropriate ways. It can also repeal Imperial Acts dealing with admiralty jurisdiction so far as they apply in Australia.

Basic Principles

There are good reasons for retaining admiralty as a distinct jurisdiction. The long history of admiralty as a distinct jurisdiction has created international business expectations, ar­ rangements and practices that rely on the fact that jurisdiction will be asserted over ships and shipowners in special ways. For these reasons it is desirable to accept the broad con­ tours of what is traditionally and internationally accepted as falling within admiralty jur­

isdiction. The prime need is for clarification within the broad framework of admiralty jurisdiction, rather than a root and branch reform involving the abolition of admiralty

xvi / Civil Admiralty Jurisdiction

jurisdiction and a restructuring of the general remedial powers of courts. Furthermore, Australia has distinct interests in admiralty and maritime jurisdiction, in view of its pos­ ition as a country of shippers rather than shipowners, and as a country dependent on for­ eign shipping for much of its import and export trade. Thus Australia's interests support a policy of maintaining and broadening admiralty jurisdiction in rem (a universal juris­ diction based on local service on the res) as an exception to a general principle of territo­ rial jurisdiction. But any expansion must take account of international trends in admir­ alty jurisdiction. Australian admiralty jurisdiction needs to remain within generally ac­ ceptable limits, to ensure recognition of judgments and judicial sales in admiralty and to maintain the position of admiralty as an exceptional and special jurisdiction. A balance thus has to be struck between the interests of ship operators and those dealing with ships. But this balance can be struck in various ways and at various levels. On balance, a broad admiralty jurisdiction is desirable, with the interests of ship owners and financiers catered for through procedural means (including guarantees against vexatious arrest, and ma­ chinery for providing alternative forms of security). And it is in the interests of all that admiralty jurisdiction be stated in clear, precise and accessible form.

Summary of Recommendations on Australian Legislation

1. A New Act. There should be a new Admiralty Act, providing for a uniform admir­ alty jurisdiction for Australia. The Colonial Courts of Admiralty Act 1890 (UK) should be repealed (para 83).

The Subject of the Action in Rem

2. Definition o f ‘Ship’. The basic elements of the definition of ‘ship’ in the Navigation Act 1912 (Cth) s 6(1) should be adopted, but with certain clarifications and exceptions. A ship should include any kind of vessel used or constructed for use in navigation by water, and include a vessel which is sunk, stranded or wrecked (para 98-9). The following should be specifically excluded from the definition o f ‘ship’:

• aircraft and seaplanes (para 100); • inland waterways vessels, defined as vessels used exclusively on Australian inland waters (para 106); • vessels under construction but not yet launched (para 108). The following should be specifically included:

• hovercraft (para 101); • off-shore industry mobile units (ie mobile rigs), as defined in the Navigation Act 1912 (Cth) s 6(1) (para 102-4).

There should be no specific exclusion for small craft or pleasure craft (para 105). There is no need to define what equipment on board a ship constitutes part of the ship for admir­ alty purposes (para 107).

3. Cargo, Freight and other Types of Res. Actions in rem can also be brought against cargo, freight and proceeds of sale in the hands of the court. The circumstances in which cargo and freight can be the subject of an action in rem are a matter of substantive law: overseas legislation such as that in the UK refers only to ‘a ship or other property’ and this formula is sufficient for the Australian legislation. However specific provision should be made for commencing actions in rem against proceeds in court of the sale of a ship or other property (para 109-10).

Summary / xvii

4. Geographical Scope of Admiralty. It is not necessary to define when an arrest (eg of a moving ship) is effective, since this is largely a matter of fact (para 112). But s 380(1) of the Navigation Act 1912 (Cth), providing for the jurisdiction of courts over any ship ‘lying or passing off the coast is vaguely worded. A specific provision should be inserted

in the legislation making it clear that the admiralty jurisdiction of Australian courts ex­ tends to service and arrest of ships in the territorial sea, subject to the limits on arrest of ships in innocent passage under art 20(2) of the Convention on the Territorial Sea and Continguous Zone of 1958 (to which Australia is a party). There should be no power to

serve process on or arrest a ship outside the territorial sea in respect of civil claims relat­ ing to the continental shelf or exclusive economic zone. This may need to be recon­ sidered later, when the question of the propriety of such extraterritorial service and arrest is better settled internationally (para 113-14). So far as claims arising on inland waters are concerned, the proposed legislation should not apply where the cause of action arose in respect of the use or intended use of a ship exclusively on Australian inland waters un­ less the ship concerned is a foreign ship (para 115).

5. Treatment of Maritime Liens in the Legislation. The legislation should maintain the existing distinction between maritime liens and statutory rights of action in rem. The pri­ mary need for expansion of admiralty jurisdiction is with respect to the latter. Pending agreement at the international level on the proper scope of maritime liens, new maritime liens should not be created (para 120-1). The legislation should state that an action in

rem may be brought in any case in which there is a maritime lien or other charge on a ship or other property, adding an indicative definition of the four important categories of lien (salvage, damage, wages and master’s disbursements) (para 122). The question of en­ forcement of foreign maritime liens should be left open (para 123).

6. Statutory Rights o f Action in Rem: Nexus with Personal Liability. In respect of each statutory right of action in rem it is necessary to identify a ‘wrongdoing’ ship, that is, a ship with respect to which the claim arose (para 124-5). Statutory rights of action in rem on proprietary maritime claims can be brought against the ship in question; the claim in question will determine the nexus with the ship (para 126). A statutory right of action in

rem with respect to a general maritime claim should only be able to be brought where, when the cause of action arose, the relevant person was connected to the ship in some way (as owner, operator, charterer or person in possession or control) and, when the pro­ ceeding is commenced, that person is the owner or demise charterer of the ship (para

126-36). If that recommendation is not accepted, an alternative is to require that the rel­ evant person be an operator of the ship when the action is commenced (including a time charterer who is effectively the operator of the ship) (para 137).

7. Ships Owned by Related Corporations. There should be no provision specifying when the corporate veil is to be lifted to determine ownership of a ship or property (para 138-41).

8. Relationship between Actions in Rem and in Personam. In personam admiralty juris­ diction needs to be retained (para 142). It should be made clear that someone who is not a relevant person but who appears in a proceeding in rem (for example a shipowner seek­ ing to defend on behalf of the ship) does not thereby become liable in personam for the payment of money (other than costs) in respect of the claim (para 143). Claims com­ menced in personam in admiralty should be commenced separately from claims com­ menced as actions in rem (para 144).

9. Scope of Statutory Rights of Action in Rem. There is no need for geographical or other restrictions on particular heads of admiralty jurisdiction: a ship should be able to be arrested on each head of jurisdiction (para 146-8). Admiralty jurisdiction in rem should be conferred with respect to:

xviii / Civil Admiralty Jurisdiction

• disputes relating to the ownership, possession or title to a ship or a share in a ship (para 149); • disputes as to co-ownership (para 150); • mortgages, including foreign mortgages or hypothecations, whether or not regis­

tered (para 151), with the Federal Court given concurrent power to rectify the reg­ ister under the Shipping Registration Act 1981 (Cth) (para 152); • claims for towage (para 153) and pilotage (para 154); • all claims relating to salvage (para 155-6), but not including under this head claims for negligent salvage or liability salvage (para 156-7); • general average claims (para 158); • claims for wages of masters and crew members (para 159); ‘crew members’ should be defined as in the Navigation Act 1912 (Cth) s 6 but apprentices should be crew members for this purpose (para 160); allottees of wages should not be included (para 161); ‘wages’ should be broadly defined (para 162); • claims for disbursements made by masters, shippers, charterers or agents on behalf of a ship (para 164); • claims for damage done by a ship (para 165); • personal injury claims occuring in the operation of a ship for which the ship own­ er, operator or charterer is liable (para 166); • claims for loss of or damage to goods carried by ship (para 167); • claims for the carriage of goods by ship (para 168); • claims arising from agreements for the use or hire of a ship (para 169); • claims for the construction, repair, alteration or equipping of a ship (including claims for construction before the ship was launched) (para 108, 170); • claims for goods, materials or services supplied to a ship (para 171); • claims for unpaid insurance premiums or protection and indemnity club calls (para 173); • dock, harbour, light and similar dues and charges (para 174); • claims for pollution damage under the Protection of the Sea (Civil Liability) Act

1981 (Cth); the jurisdictional limits in art IX of the International Convention on which that Act is based should also be given effect to (para 175); • claims for damages arising in the operation of a ship for which the ship owner, op­ erator or charterer is liable; this head of jurisdiction will include the innominate

torts at present within the inherent jurisdiction; it should be merged with the pro­ vision for personal injuries recommended in para 166 (para 179-184); • claims for the enforcement of arbitral awards in respect of maritime claims (para 186); • claims for the enforcement of local and foreign admiralty judgments in rem; such

claims should be treated as proprietary in character (para 190-2).

In personam admiralty jurisdiction should be conferred over:

• claims for damage done to a ship (para 172); • claims to limit liability under any of the International Conventions applicable in Australian law allowing for limitation of liability in relation to ships (para 176); • ancillary matters of admiralty and maritime jurisdiction associated with matters in

respect of which the court’s jurisdicton is invoked (para 195).

On the other hand, there should be no head of jurisdiction covering:

• forfeiture or condemnation of ships (para 177); • wreck and droits of admiralty; questions of wreck should be dealt with by the Navigation Act 1912 (Cth) (para 178); • ‘residual’ matters, that is matters historically within the jurisdiction of the English

admiralty court before 1890 (para 193).

Summary / xix

10. Security Pending Arbitration or Other Proceedings. The court should have power to retain security in an action in rem pending arbitration or other legal proceedings, and with power to enforce any award or judgment enforceable under Australian law against the security so retained. The court should also have power to order alternative security to be provided in such cases, before releasing the res (para 187-9).

11. Restrictions on Admiralty Jurisdiction Against Particular Defendants. There should be no special limitation on admiralty jurisdiction in cases involving local ships and de­ fendants (para 197), nor in in personam collision actions involving foreign defendants (para 198). The Crown in right of the Commonwealth, a State or a Territory (as distinct from separate trading corporations) should not be liable to an action in rem, but the sub­ stance of Navigation Act 1912 (Cth) s 405A(2) (allowing actions mistakenly commenced against the Crown in rem to proceed in personam) should be carried over into the legisla­ tion (para 199). No additional provision is necessary for ships belonging to foreign states (para 200).

12. Actions in Rem Against Surrogate Ships. ‘Sister ship’ or surrogate ship actions should be introduced in Australia (para 203-4). A surrogate ship should be able to be served and arrested in an action in rem if the relevant person was an owner or charterer of or in possession or control of the wrongdoing ship when the cause of action arose and is the owner of the surrogate ship when the action is commenced (para 204-5). All co­

owners of the surrogate ship must be relevant persons in respect of the claim (para 206). Where the relevant person is merely a charterer of the surrogate ship no action should lie (para 207). Surrogate ship arrest should not apply to proprietary maritime claims, but should apply to all general maritime claims (para 208). Actions in rem against surrogate freight and cargo should not be possible (para 209).

13. Multiple Arrest and Rearrest. In principle, only one ship should be able to be valid­ ly served and arrested in respect of any one claim (para 210). This rule and the limited exceptions to it should be spelt out in the legislation: the exceptions should be • where the service or arrest is struck out or set aside;

• (so far as service only is concerned) where the action is discontinued against the ship in question; • where a maritime lien subsists despite the arrest of a surrogate ship; • where the original ship arrested has broken arrest and custody has not been re­

gained (para 210-12, 216).

Rearrest of the same ship should be possible with the consent of the court, for example, where there has been default in the security given to procure release (para 211). Arrest should be permitted before or after judgment (para 213). Proceedings should be able to be commenced naming more than one ship, and appropriate provision for amendments substituting ships or persons named as defendants should be made (para 214-15).

14. Allocating Admiralty Jurisdiction in Personam. The Federal Court, and State and Territory courts with relevant civil jurisdiction, should have in personam jurisdiction over maritime claims under the legislation. The only exception relates to limitation actions (brought otherwise than by way of defence): these should be heard only in the Federal Court or a Supreme Court (para 233-4).

15. Allocating Admiralty Jurisdiction in Rem. The Federal Court and the Supreme Courts of each State and Territory should have concurrent jurisdiction over in rem pro­ ceedings under the legislation. There should be express provision for transfer of proceed­ ings between courts, and for co-operation in arrest and custody of ships and other prop­ erty (para 238-9). Service of process should be within the jurisdiction of the court con­ cerned, but service ex juris within Australia of Supreme Court process should be available if the res was within the State or Territory in question when the action in rem was com-

xx / Civil Admiralty Jurisdiction

menced, or during the currency of the writ (para 239). Proclaimed lower courts should be able to exercise in rem jurisdiction in specified cases where there are special circum­ stances (eg geographical remoteness) justifying this. Proceedings in rem should be able to be remitted to lower courts for trial on the merits, with custody over the res retained by

the remitting court (para 240-1). 16. Admiralty Appeals. Appeals in admiralty should proceed through the relevant Full Court or Court of Appeal, with the High Court as final court of appeal, under the ordi­ nary rules for appeals (para 242-3).

17. Arrest and in Personam Remedies, including Mareva Injunctions. The issue of Mareva injunctions against ships in actions in rem should not be prohibited or regulated but left to judicial development (para 245-7). Similarly the availability of other in per­ sonam remedies in admiralty should be left to the courts (para 248).

18. Time Limits. Time limits in admiralty actions should be assimilated with those un­ der the general law (para 249-52), with a residual time limit of 3 years to cover any re­ maining cases (para 253). In exercising any discretion to extend time limits, the absence of the res from the jurisdiction should not be relevant (para 254); s 396(3) of the Naviga­ tion Act 1912 (Cth) should be amended accordingly (para 254). The doctrine of laches

should no longer apply (para 252). 19. Priorities. There should be no codification of admiralty priorities (para 257), and no express provision is necessary to regulate the relationship between bankruptcy or in­ solvency and admiralty proceedings (para 258). But it should be made clear that a gener­ al maritime claim is not subordinated in priority by being brought against a surrogate ship (para 259-261). 20. Arrest and Statutory Rights o f Detention. Admiralty arrest should prevail over stat­ utory rights to detain a ship in respect of a civil claim which could be brought in admir­ alty. Where a ship is already under detention in respect of such a claim the court’s power

of arrest should prevail, but the claim in question should be given an appropriately high priority in distributing the proceeds of sale (para 264-5). 21. Pre-Judgment Interest. No specific provision on the court’s powers to award inter­ est in admiralty is required, but there should be a separate head of jurisdiction to cover interest due in respect of both proprietary and general maritime claims (para 268-70). 22. Repeal o f Imperial and Other Legislation. The Colonial Courts of Admiralty Act

1890 (UK) and other Imperial legislation dealing with admiralty jurisdiction should be repealed (para 271). So too should Navigation Act 1912 (Cth) s 383, 385 (para 275-6). The defence of common employment in respect of ships should be abrogated entirely by extending s 59A of that Act to cover all ships (para 276). The Navigation Act 1912 (Cth) should be validated retrospectively against possible invalidity of specific provisions on grounds of repugnancy with, or failure to comply before 1939 with any manner and form

requirements in, Imperial legislation (para 276). 23. Admiralty Procedure and Rules. There should be uniform admiralty rules, made by the Governor-General, regulating key aspects of admiralty procedure, in particular the procedural aspects of actions in rem (para 281-3). The Attorney-General should be em­ powered to constitute a Rules Committee to advise on the Rules and possible amend­ ments to them (para 282). Consequential amendments should be made by the appropriate authorities to the existing rules (para 284). Proposed rules are set out in Appendix A to this Report. Particular features include the following:

• retention of an admiralty Registrar and Marshal to be appointed by each court with in rem jurisdiction, and with power to appoint deputies (para 285-6); • a range of ancillary powers (eg assessment of damages) to be exercised by the Reg­ istrar, subject to review by the court (para 287);

Summary / xxi

• no provision for nautical assessors (para 288-91); • maintenance of a single register of caveats against arrest in the Federal Court, and of a register of admiralty proceedings, and of caveats against release, in each su­ perior court (para 292-3); • admiralty actions in rem, limitation proceedings and associated proceedings to be

tried without a jury (para 294); • retention of a system of preliminary acts for collision cases, with power in the court to order preliminary acts in a wider range of damage cases (para 295-7); • no provision for notice of arrest to consuls (para 298);

• clear procedures specified for limitation actions, broadly along the lines of those in the United Kingdom and New Zealand (para 299); • retention of caveats against arrest, which should prevent arrest without leave of the court (para 300). 24. Vexatious Arrests. An action for damages should lie where a party to proceedings unreasonably and without good cause arrests property, demands excessive security, or refuses to consent to the release of arrested property (para 301-4). The court should also

have express power to moderate bail (para 304).

Part I

INTRODUCTION

1. Introduction

1. The Terms of Reference. On 23 November 1982 the then Acting Attorney-General referred to this Commission the question of Admiralty jurisdiction in Australia. The Terms of Reference require the Commission to report generally on ‘all aspects of the Ad­ miralty jurisdiction in Australia’, though certain specific matters are listed. In preparing this Report the Commission has had regard to the Report of the Joint Committee of the

Law Council of Australia and the Maritime Law Association of Australia and New Zea­ land on Admiralty Jurisdiction in Australia. That Report was produced in 1982 by a Joint Committee under the Chairmanship of the Hon Justice HE Zelling CBE of the Supreme Court of South Australia.' The Report was a continuation of efforts by Justice Zelling over many years to bring about the reform of the Australian law of admiralty: the Com­

mission has benefited greatly from his work and writings in this area1 2, and from dis­ cussions with him.

2. Consultation on the Reference. Questions of admiralty jurisdiction were discussed at the Eighth Australian Law Reform Agencies Conference in Brisbane in July 19833, where papers were delievered by Justice Zelling4, by Professor Kevin Ryan QC and by the Commissioner in Charge of the this Reference.5 Professor Ryan (now a judge of the Supreme Court of Queensland) was also involved as a member of the Queensland Law

Reform Commission in its consideration of this topic, after a request to the Commission for advice on the Zelling Report from the Queensland Attorney-General.6 In accordance with its usual practice this Commission has consulted widely on the issues raised by the Reference, both in Australia and overseas. It has communicated with leading British law­

yers in the field: in particular with Lord Brandon of Oakbrook (formerly the Admiralty judge), Justice Barry Sheen (the present Admiralty judge), the Admiralty Marshal, Mr B Rix, and Professor David Jackson of the University, Southampton; with Mr PM Troop, Assistant Deputy Attorney-General (Admiralty and Maritime Law) in the Canadian De­

partment of Justice and with Mr DJ Shaw QC of the South African Law Commission. It consulted Commonwealth Government Departments (in particular the Attorney- General’s Department and the Departments of Transport, Trade and Foreign Affairs), State Departments of Law, and the Chief Justices or Chief Judges of Supreme Courts, the

Federal Court and the High Court. The Attorney-General appointed a number of honor­ ary consultants on the Reference, mostly from Australia but including Mr PA Cornford of the New Zealand Crown Law Office, who was involved in preparing the New Zealand

Act of 1973. Each State was asked to nominate a contact person within the relevant Attorney-General’s Department or Department of Law, and to send that person to con­ sultants meetings. Assistance with questions of Admiralty procedure and rules was given

1. On the Joint Committee’s Report see the note in (1982) 56 A LJ 617. Three members of the Committee prepared a Supplementary Memorandum advocating further provision for arrest of ‘sister ships' in­ cluding ships under charter. 2. See the Hon Justice H Zelling, 'Of Admiralty and Maritime Jurisdiction' (1982) 56 ALJ 101, and Consti­

tutional Problems of Admiralty Jurisdiction' (1984) 58 A LJ 8. 3. See Australian Law Reform Agencies Conferences 1981-83, Minutes and Records. AGPS, Canberra, 1984, 179-82. 4. Zelling (1984). 5. J Crawford, 'Admiralty Jurisdiction in Australia: The Australian Law Reform Commission's Reference'

(1983) 1(2) M LAANZJ 4. 6. See [1983] Reform 86. This was a request for advice rather than a formal reference to the QLRC. This Commission has been kept informed of the QLRC’s work on the topic.

4 / Civil Admiralty Jurisdiction

by a number of people, and in particular by Mr Bruce Brown, Secretary of the Rules Committee of the NSW Supreme Court.

3. The Commission’s Consultative Papers. To further this process of consultation the Commission issued three Research Papers on civil admiralty jurisdiction. These papers were made available to consultants and others interested in commenting in detail on the issues involved.7 In particular Research Paper 3, which included the texts of proposed legislation and draft uniform rules, with annotations and commentary, was widely dis­ tributed, as was the Commission’s summary Discussion Paper 21, Admiralty Jurisdiction (November 1984).

4. Public Meetings and Other Discussions o f the Commission’s Proposals. In addition to two consultants meetings (and meetings of a sub-committee of consultants to consider the proposed Admiralty Rules), the Commission held a number of meetings and other discussions on the Reference. In February 1985 public meetings were held, in conjunc­ tion with the Maritime Law Association of Australia and New Zealand (MLAANZ) in the five mainland capital cities. In May 1985 a similar meeting was held in Launceston, Tasmania in conjunction with the Australian Maritime College. A morning session of the

MLAANZ Annual Conference in Melbourne in October 1985 was devoted to the Refer­ ence, and to discussion of the draft proposals. Items relating to the Reference appeared in the press and in specialist journals. Over 80 written submissions were made to the Commission: a list of these is set out in Appendix B.

5. Overseas Developments. At the same time as these questions have been discussed in Australia, there has been considerable activity in comparable jurisdictions elsewhere. New Zealand8 and Canada9 enacted legislation in the 1970s providing a new basis for the exercise of admiralty jurisdiction. The scope of admiralty jurisdiction in England was broadened by the Supreme Court Act 1981 (UK), so as to bring it more into line with the

Brussels Convention on the Arrest of Sea-Going Ships of 195210, but the extension was not without controversy.11 Subsequently, at the request of the United Kingdom Govern­ ment, a Sub-Committee of the British Maritime Law Association under the Chairmanship of Justice B Sheen has undertaken a study of the whole question of security for maritime property or claims. Work on maritime liens, mortgages and arrest is also being under­ taken by the Comite Maritime International (CMI), and by the International Maritime

Organisation. A meeting of the CMI in Lisbon in May 1985 to discuss revisions to the 1952 Convention was attended by Justice KJ Carruthers, one of the Commission’s con­ sultants on the Reference, who kept the Commission fully informed of developments there.12 Of particular significance from an Australian point of view are recent develop­ ments in South Africa, which like Australia for long depended for its admiralty jurisdic-7. These Research Papers were as follows:

• Ad RP 1 (S Curran and D Cremean), An Australian Admiralty Act: The Ambit o f Admiralty Jurisdic­ tion, November 1984. • Ad RP 2 (S Curran), Admiralty Jurisdiction in Australia: The Courts Exercising Original and Appellate Jurisdiction, June 1984. • Ad RP 3 (V Thompson and S Curran), Draft Legislation: Admiralty Procedure and Rules, September

1985.

8. Admiralty Act 1973 (NZ), following the Report of the Special Law Reform Committee (Chairman: Beattie J), Admiralty Jurisdiction, Wellington, 1972. See DJ Beattie, ‘The Admiralty Act 1973' [1976] N ZLJ 365. 9. Federal Court Act 1970 (Can). See DN Rogers, ‘Admiralty Jurisdiction in Canada: Is there a Need for

Reform?’ (1985) 16 JM L C 467. 10. International Convention for the Unification of Certain Rules relating to the Arrest of Sea-Going Ships, Brussels, 10 May 1952, 439 UNTS 193. 11. See DC Jackson, ‘Admiralty Jurisdiction — The Supreme Court Act 198 Γ [1982] LM CLQ 236. 12. The meeting produced a Draft Revision of the Brussels Convention of 1952: see LIS/ARREST — 30

(1985). See further para 94.

Introduction / 5

tion on the Colonial Courts of Admiralty Act 1890 (UK). Following a Report of the South African Law Commission in 1983, the Admiralty Jurisdiction Regulation Act 1983 (SAf) was passed.13 Although this Act differs in some respects from the Bill recommended by the South African Law Commission, it does extend admiralty jurisdiction significantly beyond the position taken in England under the Supreme Court Act 1981 (UK). The member of the South African Law Commission in charge of the Admiralty Law project,

Mr DJ Shaw QC, most helpfully provided this Commission with information about the implementation and progress of the 1983 Act. 6. The Need for Reform. The time is overdue, therefore, for a thorough consideration of civil admiralty jurisdiction in Australia. This Report deals with civil admiralty jurisdic­ tion. Part II describes the present Australian law and the scope of Commonwealth consti­

tutional power to reform admiralty jurisdiction. Part III deals with the reform of civil ad­ miralty jurisdiction, including such matters as: • the basic principles underlying reform (ch 6); • which ships or other forms of res should be subject to arrest (ch 7);

• the treatment of maritime liens and statutory rights of action in rem in the pro­ posed legislation, including questions of the relationship between in rem and in personam liability (ch 8); • what heads of jurisdiction, giving rise to statutory rights of action in rem, should

exist, and what limitations, if any, there should be on this jurisdiction by reference to particular classes of defendants (for example, the Crown, local residents) (ch 9); • the arrest of sister ships or surrogate ships, and questions of rearrest and multiple arrest (ch 10); • which courts should exercise the jurisdiction (ch 11);

• questions of remedies, time limits and priorities (ch 12); and • the relationship of the proposed legislation to other laws (ch 13). Part IV (chapter 14) deals with questions of admiralty procedure and rules. The Commis­ sion’s recommended legislation, in the form of an Admiralty Bill and proposed uniform Admiralty Rules, is set out in Appendix A. Appendix A also contains an Admiralty (Mis­ cellaneous Provisions) Bill and the annotations to the proposed legislation. 7. Criminal Admiralty Jurisdiction and Prize. In addition to these questions of civil admiralty jurisdiction, the Terms of Reference require the Commission to consider the separate issues of criminal admiralty jurisdiction and prize law. These are less urgent matters, which are separate and distinct from the topic of civil admiralty jurisdiction. A separate report will be issued on these topics.14

13. Act No 105 of 1983. See South African Law Commission, Report on the Review o f the Law o f Admiralty. Project 32, 1982; H Staniland, ‘The Implementation of the Admiralty Jurisdiction Regulation Act in South Africa’ [1985] LM CLQ 462. 14. See Ad RP 5 (S Curran), Prize Law, Jurisdiction and Procedure. December 1984.

Part II

CIVIL ADMIRALTY JU R ISD IC TIO N : THE PRESENT LAW

2. The

Development of Admiralty Jurisdiction

8. The Relevance o f History. Before discussing the present law of admiralty jurisdic­ tion it is necessary to describe briefly its historical development in England and its recep­ tion in Australia. A survey of the development of admiralty jurisdiction makes it clear how much the present state of that jurisdiction is the result of historical accident and of

conflicts between courts over business, and how little it is the product of any coherent as­ sessment of need. It also helps in gaining an understanding of the confused theoretical underpinnings of the maritime lien and the action in rem, and in particular of the import­ ant differences between a maritime lien and a statutory right of action in rem.

The Development of English Admiralty

9. The Early English History. Courts exercising admiralty jurisdiction in Australia today are the successors to what used to be the High Court of Admiralty in England, whose origins are traceable to the 14th century.1 A court dealing with piracy and other of­ fences committed at sea was an outward sign of the sovereignty of the seas claimed by

English kings of the period. The Admirals and their deputies did not long confine them­ selves to the hearing of criminal cases, but soon asserted a right to a larger jurisdiction by hearing civil suits as well. This aroused opposition and led to two statutes enacted during the reign of Richard II.2 The first, enacted in 1389, provided that:

the Admirals and their Deputies shall not meddle henceforth with anything done within the Realm, but only such things done upon the sea according as was used in the time of the noble King Edward, Grandfather of our Lord the King that now is.3 * * * * * * *

The second, enacted in 1391, provided:

!■ RG Marsden, Select Pleas in the Court o f Admiralty. Selden Society, London, 1894. vol 1, xiv. On the his­ tory of the Court generally see also W Holdsworth, A History o f English Law. 7th edn, Methuen, London, 1956, vol 1, 544-68; FL Wiswall, The Development o f Admiralty Jurisdiction and Practice since 1800. CUP, London, 1970, 4-11; CW O'Hare, ‘Admiralty Jurisdiction’ (1979) 6 Monash ULR 91, 195. 2. The background is described in R v Keyn (1876) 2 Ex D 63, 167-8. 3. 13 Ric II, st 1, c 5, repealed in England by the Statute Law Revision and Civil Procedure Act 1881 (UK)

as being spent. But the repeal ‘shall not affect ... any jurisdiction ... established or confirmed ... under any enactment repealed by this Act' (s 4). Earlier in the 19th century various Acts had effected partial implied repeals of the 1389 Act: see particularly Admiralty Courts Act 1840 (UK) s 6. The South Australian Law Reform Committee, Report No 61, Inherited Imperial Law and Civil Jurisdiction and Procedure o f the Su­

preme Court. 1980, 7 recommended against repeal of the 1389 Act: ‘we think that the statute should re­ main for the time being until the whole question of admiralty jurisdiction has been dealt with'. Contrast NSWLRC, Report No 4, Application o f Imperial Acts. 1967, 76-7; ACTLRC, Report on Imperial Acts in Force in the Australian Capital Territory. 1973, 27, which recommended repeal. In NSW the repeal was ef­ fected by the Imperial Acts Application Act 1969 (NSW). There has not yet been any repeal in the ACT.

For Victoria see Imperial Acts Application Acts 1922 and 1980 (Vic).

10 / Civil Admiralty Jurisdiction

that of all Manner of Contracts, Pleas and Quarrels, and of all other things done or arising within the Bodies of the Counties, as well by Land as by Water and also of Wreck of the Sea, the Admiral’s Court shall have no Manner of Cognizance, Power, nor Jurisdiction.4

Further petitions having been received about the encroachments of the Admiral’s Court, yet another enactment, passed in 1400, provided that anyone wrongfully pursued in Ad­ miralty ‘shall recover his Double Damages against such Pursuant; and such Pursuant shall incur the Pain of Ten Pounds to the King for the Pursuit so made, if he be at­ tained’.5

10. Bitter Jurisdictional Conflicts. The Tudor period saw a revival of interest in the jur­ isdiction of the Admiral’s Court. The patents of the Admirals of the period provide for wide-ranging grants of jurisdiction.6 In several instances they omit the proviso to be found in earlier patents, which confined the jurisdiction to the limits marked out by the statutes of Richard II, and they state that the jurisdiction they confer is to be exercised ‘any statutes, acts, ordinances, or restrictions to the contrary passed, promulgated, or­ dained or provided notwithstanding'.7 The common law courts retaliated. Basing their at­ tack upon the statutory foundation provided by the Acts of Richard II, they had recourse to prohibitions at common law, which issued constantly.8 Following a conference with the common law judges, articles of agreement were drawn up in 1575 in an endeavour to settle the jurisdictional questions.9 These did not, however, settle the confict, which reached an acute stage when Coke became Chief Justice.10 Coke denied that the Admir­ alty Court was a court of record.* 12 He denied it had any jurisdiction over contracts made on land, whether abroad or not, and whether or not they were maritime or were to be performed upon the sea.13 When the civil lawyers, who practised in the Admiralty Court, petitioned James I, relying on the agreement reached in 1575, Coke denied that that agreement had ever been ratified.14 In 1632 another compromise was attempted but the agreement arrived at — if it was acted upon at all — was short-lived.15 Under the Com­ monwealth an ordinance was passed in 1648 defining and considerably extending the scope of the Admiral’s jurisdiction, but at the Restoration that ordinance was set aside as of no validity.16 A determined civilian effort was subsequently made to persuade the

Parliament to have the provisions of the ordinance re-enacted in statutory form, but it met with no success.17 The Court fell into a decline thereafter, confining itself largely to its work in prize.18

4. 15 Ric II, c 3, repealed in England as to the part quoted (ie, civil jurisdiction) by the Civil Procedure Acts Repeal Act 1879 (UK). As to the Australian position, all the points made in n 3 apply. The Imperial Acts Application Act 1922 (Vic) s 6 read with Schedule 2 preserves the status quo with respect to this Act: it makes no reference to 13 Ric II, st 1, c 3. Both the 1389 and 1391 Acts are listed in ACT, Table o f Im­ perial and New South Wales Acts that could be in force in the Territory, AGPS, Canberra, 1983. 5. 2 Hen IV, c 11. This Act was repealed by the Admiralty Court Act 1861 (UK) s 31 and is therefore no

longer in force in Australia. While noting this, the SALRC 61,7 recommended in 1980 that ‘for certainty it might be as well to repeal it in South Australia'. 6. RG Marsden, Select Pleas in the Court o f Admiralty, Selden Society, London, 1897, vol 2, lvii-lix. 7. id, lvii-lviii. 8. id, xli.

9. Holdsworth (1956) 553; O’Hare (1979) 94-5. 10. Marsden (1897) xli; O’Hare (1979) 93-4. 12. id, 550. 13. Thomlinson's Case (1605) 12 Co Rep 104; 77 ER 1379. 14. Holdsworth (1956) 553. 15. id, 555. 16. id, 556. 17. Wiswall (1970) 6. 18. id, 7.

The Development o f Admiralty Jurisdiction / I I

11. The Admiralty Court Acts, 1840 and 1861. This decline was not reversed until there began, in 181319, a statutory process that was to restore much of the Court’s former juris­ diction and add to it much new jurisdiction. The principal reforms were passed in 1840 and 1861. By the Admiralty Court Act 1840 (UK) the Court was given jurisdiction, sub­ ject to the terms of the Act, over claims involving ships’ mortgages20 and over claims in

salvage, towage, damage, wages and necessaries, bottomry and possession (even though those may have arisen within the body of a county).21 The Act for the first time authorised rules of court to be made.22 By the Admiralty Court Act 1861 (UK) the Court was at last

declared to be a court of record with all the powers of a superior court of common law.23 The jurisdiction given included questions involving the ownership of ships and claims for damage to cargo and for the building, equipping and repairing of ships.24 All the jurisdic­ tion conferred could be exercised either in rem or in personam.25

12. Subsequent Restatements and Additions. The admiralty jurisdiction thus established was restated and to some extent enlarged in 1920.26 It was again substantially enlarged by the Administration of Justice Act 1956 (UK). That Act was passed in part to give effect to Conventions signed at Brussels on 10 May 1952 concerning Civil Jurisdiction in Matters

of Collision and the Arrest of Sea-Going Ships.27 The High Court now exercises admir­ alty jurisdiction under the Supreme Court Act 1981 (UK).28

13. Courts Exercising Admiralty Jurisdiction in England. Although admiralty had devel­ oped as a specialist jurisdiction vested in a specialist court, the Judicature Commission in 1869 recommended the amalgamation of Admiralty and common law courts to eliminate non-suits and to take advantage of the more attractive remedies of admiralty.29 Its recom­ mendations were implemented by the Supreme Court of Judicature Act 1873 (UK). The

High Court was divided into five Divisions, to one of which — the Probate, Divorce and Admiralty Division — was assigned all the admiralty business. In 1970 the Division was abolished, being replaced by an Admiralty Court sitting as part of the Queen’s Bench Division.30 Although admiralty continues to be recognised as an area for specialists, the basic principles of the Judicature Act system apply, subject to the special situations some­ times created by the action in rem, which remains the distinctive feature of admiralty.

14. Nature of the Action In Rem. Before examining Australian developments it is necessary to sketch briefly developments during the last century and a half concerning the action in rem. According to Wiswall:

The action in rem seems to have been employed in Admiralty before the Elizabethan era, but only by the nineteenth century had it become the dominant Admiralty pro­ cedure; and it was in the mid-nineteenth century — as a result of the dominance of the action in rem — that the modern theory of maritime liens began to evolve. The

19. See the Frauds by Boatmen Act 1813 (53 Geo III, c 87) (UK); Wiswall (1970) 22. 20. s 3.

21. s 4, 6.

22. s 18. 23. s 14, 15. 24. s 4, 6, 8.

25. s 35. 26. Administration of Justice Act 1920 (UK) consolidated in Supreme Court of Judicature (Consolidation) Act 1925 (UK) s 22-3. 27. 439 UNTS 217, 193 respectively. See para 5. 28. s 6, 20-4, 62. The Administration of Justice Act 1956 (UK) continues to apply in Scotland and in some

British colonies, including Hong Kong. 29. See First Report of the Commission on the Judicature, British Parliamentary Papers. 1868-74, 7, 9; O'Hare (1979) 108-9. 30. Administration of Justice Act 1970 (UK) s 2. See now Supreme Court Act 1981 (UK) s 6.

12 / Civil Admiralty Jurisdiction

beginning of consideration of the action in rem itself must lie in the emergence of the theory of maritime liens, for the two have since become inextricably intertwined.31

The theory of maritime liens (which are inchoate property rights in the ship concerned, based on the right to sue the ship in admiralty) was first clearly articulated in England in 1851 by the Privy Council in The Bold Buccleugh.32 The Privy Council identified the fol­ lowing characteristics of a maritime lien: it does not include or require possession; the lien adheres to the res notwithstanding the fact that the res has been sold to a bona fide purchaser without knowledge of it; it is inchoate from the moment the claim attaches and when carried into effect by legal process it relates back to the time when it first attached; the legal process in question is an action in rem and hence a maritime lien can only be enforced in admiralty; conversely, wherever a proceeding in rem is the proper course, there a maritime lien exists; and finally the maritime lien/action in rem is not merely a procedural device to secure the appearance of the defendant. The last two propositions require elaboration.

15. Statutory Rights o f Action In Rem. Even if it was ever true that, wherever an action in rem could be properly brought, the cause of action also gave rise to a maritime lien33, this was no longer the case by the end of the 19th century. The additions to admiralty jur­ isdiction made by statute, particularly the Admiralty Court Acts of 1840 and 1861, posed something of a dilemma. Was a new category of maritime lien created by each addition to admiralty jurisdiction? After some hesitation34 the courts concluded that, where the new jurisdiction arose merely because some restriction (usually geographical) had been removed from a class of claims which had previously given rise to maritime liens35, the maritime lien was extended to match the new jurisdiction.36 By contrast, where an entire­ ly new class of claims was brought within admiralty jurisdiction, no maritime lien was created.37 Instead, the effect of the statutory extensions of jurisdiction was to create a wholly novel38 form of action sometimes referred to as a statutory lien but more accurate­ ly described as a statutory right of action in rem.39 While not all the characteristics of a statutory right of action in rem have yet been worked out, the main outlines are clear. Un­ less already carried into effect by the commencement of proceedings in rem, the right does not survive a bona fide change of ownership. In any competition between claims it ranks after both the maritime lien and the mortgage in priority. It does not relate back to the time when the cause of action arose but gives a security interest only when proceed-

31. Wiswall (1970) 155. 32. (1851) 7 Moo PC 267, 283-5; 13 ER 884, 890-1. 33. See The Henrich Bjorn (1886) 11 App Cas 270, 283 (Lord Bramwell), 286 (Lord Fitzgerald) where it is as­ serted that the proposition was inaccurate even as regards the pre-1840 jurisdiction of admiralty. As a

contemporary writer put it, ‘[t]he question has been much agitated whether during the period immediately preceding the extension of its jurisdiction, which was begun in 1840, the Court of Admiralty entertained suits in rem in any case in which there was not an existing maritime lien': J Mansfield, ‘Maritime Lien' (1888) 4 LQR 379, 381. See also para 46 n 73 on the doubtful status of the maritime lien for pilotage. However the proposition was and remains accurate for the admiralty law of the United States. 34. See eg The Two Ellens (1871) LR 3 A & E 345, 355-7 where Sir Robert Phillimore traces the various shifts

in the view of his predecessor, Dr Lushington, on the point. See also The Heinrich Bjorn (1885) 10 PD 44, 60 (Fry LJ) for another survey. 35. eg. Admiralty Court Act 1840 (UK) s 5 which removed the exclusion of admiralty jurisdiction over collis­ ions occurring within the body of a county. 36. The Two Ellens (1872) LR 4 PC 161, 167 (PC); The Henrich Bjorn (1886) 11 App Cas 270, 282-3 (Lord

Bramwell); The Sara (1889) 14 App Cas 209, 216 (Lord Halsbury). 37. The Two Ellens (1872) LR 4 PC 161; The Pieve Superiore (1874) LR 5 PC 482; The Henrich Bjorn (1886) 11 App Cas 270. 38. But cf n 33. 39. On terminology see The Si Merriel [1963] P 247, 253 (Hewson J); The Monica S [1968] P 741, 768 (Bran­

don J). See also DC Jackson, Enforcement o f Maritime Claims. Lloyd’s of London Press, London, 1985, 253-5.

The Development o f Admiralty Jurisdiction / 13

ings are commenced.40 It is, initially, merely a right to commence proceedings to arrest the property in an action in rem.41 One 19th century writer contrasted maritime liens with statutory rights of action in rem by noting that while on some occasions recourse is had to the jurisdiction in rem for the purpose of giving ef­

fect to a maritime lien already existing and attaching to the res, on other occasions any rights which a suitor may have over the res have their origin in the exercise of that jurisdiction, and not in the circumstances which called for it.42

16. Relevance of the Distinction between Maritime Liens and Statutory Rights of Action In Rem. The decisions which involve these rights all turn on the interpretation of the stat­ ute which expanded the subject matter of admiralty jurisdiction. These decisions remain important for a number of reasons. They delineate the scope of the maritime liens which

exist today and establish the two-tier framework, lien and statutory right, which is a fea­ ture of present admiralty law in England and Australia, and which has various conse­ quences for the rights of the parties. They may also be relevant in determining the mean­

ing of the phrase ‘Admiralty jurisdiction’ in s 76(iii) of the Constitution. The premise underlying the 19th century decisions is that statutes which expanded the range of mat­ ters which could be brought in admiralty were essentially procedural statutes dealing with admiralty jurisdiction, even though those statutes had various substantive effects on the rights of parties.43 The English decisions were not dealing with a head of constitutional power; and the weight to be accorded to them in Australia will be considered in chap­ ter 5. Here it is enough to say that they seem to suggest that a statutory right of action in

rem is a procedural right, while a maritime lien is a substantive right.44 To use the lan­ guage of Lord Watson in The Henrich Bjorn, the former relates to remedies, the latter to the rights of suitors.45

17. The Personification and Procedural Theories. A second strand which runs from The Bold Buccleugh46 to the present day is one of competition between two theories each of which purports to explain the action in rem. The personification theory, as its name sug­ gests, treats the ship as a ‘person’, a legal entity. The procedural theory treats the arrest of a ship as essentially a device to compel the appearance of the owner of the ship. The Bold

Buccleugh is generally regarded as the high-water mark of the personification theory.47 The decision in 1892 of Sir Francis Jeune in The Dictator48 is regarded as marking the beginning of a switch to the procedural theory, though a number of decisions (both earl­ ier and later) are inconsistent with the personification theory.49 The statutory adoption of

40. On the other hand once proceedings have been commenced on a statutory right of action in rem they are not defeated by subsequent sale of the res (even if it has not been served): The Monica S [1968] P 741. There is thus a form of security interest once proceedings are commenced, which is sometimes referred to as a ‘statutory lien’. 41. G Price, ‘Statutory Rights in Rem in English Admiralty Law' (1945) 27 J o f Comp Leg & Ini Law 21, 24. 42. Mansfield (1888) 379. But there is nothing inevitable about this distinction between maritime liens and

statutory rights in rem : cf ibid; Price (1945) 24. 43. See eg The Marv Ann (1865) LR 1 A & E 8; The Pieve Superiore (1874) LR 5 PC 482; The Henrich Bjorn (1886) II App Cas 270, 277 (Lord Watson) 283 (Lord Bramwell) (the Admiralty Court Act 1861 (UK) ‘gave, as it says, jurisdiction and jurisdiction only’). 44. See eg The Henrich Bjorn (1886) 11 App Cas 270, 278 (Lord Watson). See also The Monica S [1968] P 741,

768 (Brandon J) (‘a statutory right o f action in rem is a procedural right'). But cf Jackson (1985) 253-5, pointing out that both classes of right are as much substantive as procedural. 45. (1886) 11 App Cas 270, 278. See also The Alexander (1842) 1 Wm Rob 346, 360; 166 ER 602, 608 (Dr Lushington). 46. (1851) 7 Moo PC 267; 13 ER 884. 47. O’Hare (1979) 202. 48. [1892] P 304. 49. O’Hare (1979) 204. Wiswall (1970) ch 6 charts the switch. A useful balance to his championing of the per­

sonification theory is to be found in G Gilmore & CL Black, The Law o f Admiralty, 2nd edn, Foundation Press, Mineola NY, 1975, 613-6.

14 / Civil Admiralty Jurisdiction

the facility of ‘sister ship’ arrest in 19 5 650 marks a further step towards acceptance of the procedural theory. There are indications that English admiralty judges are willing to take additional steps in the same direction.51 But still ‘there is much modern law which it is

impossible to relate to the tenets of the procedural theory’.52 It will become necessary to refer to these aspects in various contexts later. The point is that there is no single theory which is capable of explaining all the features of the action in rem. In this admiralty re­ sembles the common law which is in many areas equally atheoretical. But it does make the reform of Admiralty jurisdiction more difficult. Many of these issues have existed for many years, yet there are still basic questions upon which there is no guiding precedent. The absence of any single unifying theory means that the gaps thus left cannot be filled by reference to a basic theory. How one chooses to fill any particular gap often has impli­ cations for how other gaps should be filled. Thus even if the proposed legislation does not resolve all the questions, the way in which any one point is dealt with may have wider implications.

Developments in Australia

18. Vice Admiralty Courts. Admiralty jurisdiction in Australia derived initially from Royal letters patent of 12 April 1787 which authorised the Lords Commissioners of the Admiralty: to constitute and appoint a Vice Admiral and also a Judge and other Officers requisite for a

Court of Vice Admiralty within the ... Territory called New South Wales in like manner as Vice Admirals Judges and other proper officers of such Courts have been constituted ... in places where they have been usually heretofore appointed.53

Pursuant to this patent, on 30 April 1787, letters patent under the seal of the High Court of Admiralty appointed Governor Phillip to be Vice Admiral and Robert Ross as Judge in Vice Admiralty. Following the usual form, with great particularity, Ross was given ‘full power to take cognizance of and proceed in all causes civil and maritime ... according to the civil and maritime laws and customs of our said High Court of Admiralty’.54 His authority extended as well to ‘offences or suspected offences [and to] crimes’. Further let­ ters patent were issued in May 1787 to appoint Commissioners under the Piracy Act 1698 (UK) ‘to call and assemble a Court of Admiralty on shipboard or upon the land when and as often as occasion shall require’ to deal with cases of piracy, robbery and felony on the high seas.55 It was under the patent relating to piracy, rather than under the general patent of April 1787, that the first Court of Vice Admiralty was assembled in Australia.56 The Court thus established remained always an Imperial court external to the ordinary court system. It was unaffected by the creation of three civil courts in New South Wales in 1814; nor was any of its jurisdiction withdrawn when in 1823, and again in 1828, the

Supreme Court was invested with a criminal jurisdiction over maritime offences.57 Its judge held office by virtue of an appointment from the British Admiralty and not through

50. Administration of Justice Act 1956 (UK) s 3(4). This followed the adoption of sister ship arrest in the Brussels Convention of 1952, art 3(1) & (4). 51. See eg the comments of Brandon J in The Conoco Britannia [1972] 2 QB 543, 555. 52. DR Thomas, Maritime Liens, Stevens, London, 1980, para 8a. It should be said that the courts have also

been inconsistent in their classification of maritime liens as ‘substantive" or ‘procedural’: see especially The Halcyon Isle [1981] AC 221. 53. See JM Bennett, A History o f the Supreme Court o f New South Wales, Law Book Co, Sydney, 1974, 152. 54. id, 238-9. 55. Historical Records o f Australia, series IV, vol 1, 13, 17. 56. Bennett (1974) 155. See further NSW Archives Authority, Vice Admiralty Court o f New South Wales

1787-1911, NSW State Archives Guide No 22, Sydney, 1980. 57. O’Hare (1979) 111.

The Development o f Admiralty Jurisdiction / 15

appointment as judge of the colony. From an early stage its proceedings were regulated by an Imperial Act, the Vice Admiralty Courts Act 1832 (UK), and by Rules and Tables of Fees promulgated under that Act.

19. Vice Admiralty Courts Act 1863 (UK). By 1863, Vice Admiralty Courts had been es­ tablished in all the Australian colonies. Although their jurisdiction was the same as that of the High Court of Admiralty, they did not succeed to the statutory additions made to that Court’s jurisdiction by the Admiralty Court Acts of 1840 and 1861. To bring their jurisdiction more into accord with that of the English Court and to provide for their bet­

ter administration, the Vice Admiralty Courts Act 1863 (UK) was passed58, restating their jurisdiction over suits for seamen’s wages, pilotage, bottomry, damage by collision, breaches of navy regulations, salvage and droits of Admiralty59, and giving them new jur­ isdiction over claims involving ships mortgages, claims arising between owners touching

the ownership, possession, employment or earnings of any registered ship, and claims for master’s wages, towage, for the building, equipping and repairing of ships, for life salvage and for necessaries.60 The Act also provided for a right of appeal to the Judicial Commit­ tee, provided for Rules of Court (eventually promulgated in 1883), and empowered the judge in Vice Admiralty to appoint a Registrar or Marshal.61

20. The Colonial Courts of Admiralty Act 1890 (UK). To have an entirely separate Im­ perial court, existing side by side with the ordinary colonial courts yet utilising their fa­ cilities and personnel, was widely regarded as unsatisfactory. Change was brought about by the Colonial Courts of Admiralty Act 1890 (UK), the main purpose of which was to replace the system of Vice Admiralty Courts with a new system of non-imperial courts to be called Colonial Courts of Admiralty.62 The Act provided that, upon its commencement in a British possession, every Vice Admiralty Court in that possession was to be abolished and every court of law in that possession declared under the Act to be a court of Admir­

alty or (if no such declaration was made) having original unlimited civil jurisdiction was to become a Colonial Court of Admiralty with the jurisdiction specified in the Act.63

21. Application of the 1890 Act in Australia. The Colonial Courts of Admiralty Act 1890 (UK) commenced operation in the Australian colonies, except New South Wales and Victoria, on 1 July 1891. Those two colonies were listed in the First Schedule to the Act as British possessions in which, under s 16(1), its operation was delayed, due to local

fears, it seems, that Imperial control was to be exercised over the colonial courts.64 The fears subsided and the Act came into force in Victoria and New South Wales on 1 July 1911, pursuant to an Order in Council of 4 May 1911 made under s 14. The Colonial Courts of Admiralty Act 1890 (UK) is still in force and remains the principal source of

civil jurisdiction in admiralty in Australia today. Another source may be the Judiciary Act 1903 (Cth), s 39, to the extent that it invests ‘admiralty and maritime’ jurisdiction un­ der s 76(iii) of the Constitution in State courts.65 Other sources include the Merchant Shipping Act 1894 (UK) and the Navigation Act 1912 (Cth). Colonial Courts of Admir­

alty sitting under the 1890 Act possess jurisdiction over ‘like places, persons, matters, and things, as the Admiralty jurisdiction of the High Court in England, whether existing by

58. AC Castles, An Australian Legal History. Law Book Co, Sydney 1982, 363-4. 59. s 10, 11. Jurisdiction in those matters had previously been conferred by the Vice Admiralty Courts Act 1821 (2 Geo IV, c51)(UK). 60. s 10. 61. s 22, 23. 62. See Mcllwraith McEacharn Limited v The Shell Company o f Australia Limited (1945) 70 CLR 175, 189

(Latham CJ). 63. s 2, 16, 17. 64. Bennett (1974) 163. The reasons for local opposition remain obscure. That given in the text was a surmise of Lord Knutsford, Secretary of State for the Colonies. 65. See para 31-3.

16 / Civil Admiralty Jurisdiction

virtue of any statute or otherwise’ and may exercise that jurisdiction to the same extent.66 However their jurisdiction does not extend to the English Court’s jurisdiction as existing from time to time, but only at the time when the Act was passed.67 Jurisdiction under the Act therefore extends only to the jurisdiction which that court possessed in 1891. The Act allows for a right of appeal to the Judicial Committee either where there is as of right no local appeal or after a decision given on local appeal, and enables local Rules of Court to be made.68 It also authorises local laws to confer limited admiralty jurisdiction upon infe­ rior or subordinate courts.69

Other Commonwealth Countries

22. Replacement o f 1890 Act by Local Statutes. The Colonial Courts of Admiralty Act 1890 (UK) came into force in Canada, New Zealand and, except as otherwise provided, every other British possession on 1 July 1891. Following the passage of the Statute of Westminister 1931 (UK), the Admiralty Act 1891 (Can) was replaced by the Admiralty Act 1934 (Can).70 That Act repealed the Colonial Courts of Admiralty Act 1890 (UK) in so far as it formed part of the law of Canada. In 1970 the Admiralty Act 1934 (Can) was in its turn repealed and replaced by the Federal Court Act 1970 (Can). The admiralty provisions of the Administration of Justice Act 1956 (UK) have served as the model for laws which have been passed, replacing the Colonial Courts of Admiralty Act 1890 (UK), in Singapore, Bermuda, Malaysia, and New Zealand.71 South Africa in 1972 provided for the repeal of the 1890 Act, but the old jurisdiction would have been continued by the

1972 Act itself.72 The 1972 Act, however, never commenced operation so that the 1890 Act continued in force in the Republic until its repeal by the Admiralty Jurisdiction Regulation Act 1983 (SAf), which now regulates admiralty jurisdiction in South Africa.73

66. s 2(2). 67. The Yuri Maru. The Woron [1927] AC 906, 915. See DJ Cremean, Jurisdiction in Admiralty in Australia. Monash Uni, Ph D Thesis, 1980, 64-6. 68. s 6, 7.

69. s 3(b). Purportedly in exercise of this power the Broome Local Court Admiralty Jurisdiction Act 1917 (WA) was passed. 70. See RW Kerr, "Constitutional Limitations on the Admiralty Jurisdiction of the Federal Court" (1979) 5 Dalhousie LJ 568, 571. 71. Courts (Admiralty Jurisdiction) Ordinance 1961 (Singapore); Supreme Court (Admiralty Jurisdiction)

Act 1962 (Bermuda); Courts of Judicature Act 1964 (Malaysia); Admiralty Act 1973 (NZ). The position in Papua New Guinea is as anomalous as it is remarkable. The effect of the legislation accompanying in­ dependence in 1975 was accidentally to repeal the 1890 Act for the former territory of Papua, without re­ placing it. The Act continued to apply to New Guinea. In The Ship 'Federal Huron’ v OK Tedi Mining

Ltd. unreported, PNG Supreme Court, 30 Jan 1986, the Supreme Court filled the gap by reinserting the 1890 Act in the exercise of its power to develop the ‘underlying law’ (Constitution, Sch 2.3). 72. Admiralty Jurisdiction Regulation Act 1972 (SAf) s 1, 4. 73. See para 5.

3. Australian Courts Exercising Admiralty Jurisdiction

Original Civil Jurisdiction

23. Colonial Courts of Admiralty. The principal source of civil admiralty jurisdiction in Australia remains an Imperial Act, the Colonial Courts of Admiralty Act 1890 (UK). This defines the scope of admiralty jurisdiction and determines which courts shall exercise that jurisdiction. There has been a tendency to speak of Colonial Courts of Admiralty as a distinct set of Imperial courts1, which they are not, and were never intended to be.2 3 As the

Act makes clear, they are courts possessing other jurisdictions, which only go by that name when exercising the jurisdiction conferred by the Act or upon them as such by other Acts. A court is a Colonial Court of Admiralty if it qualifies under s 2(1) of the Col­ onial Courts of Admiralty Act 1890 (UK), which provides:

Every court of law in a British possession, which is for the time being declared in pursuance of this Act to be a court of Admiralty, or which, if no such declaration is in force in the possess­ ion, has therein original unlimited civil jurisdiction, shall be a court of Admiralty, with the jur­ isdiction in this Act mentioned ... and such court in reference to the jurisdiction conferred by

this Act is in this Act referred to as a Colonial Court of Admiralty.

This provision raises three questions: the meaning of ‘British possession’, the meaning of ‘original unlimited civil jurisdiction’, and the consequences of a declaration under s 2(1). 24. The Meaning of British Possession'. The Interpretation Act 1889 (UK) s 18(2) de­ fines ‘British possession’ as:

any part of Her Majesty’s dominions exclusive of the United Kingdom, and where parts of such dominions are under both a central and a local legislature, all parts under the central leg­ islature shall, for the purposes of this definition, be deemed to be one British possession.

In the first case to consider the question, John Sharp ά Sons Ltd v The Ship Katherine MackalP, the High Court had little hesitation in applying this definition to hold that, in Australia, the ‘British possession’ referred to in s 2(1) of the Colonial Courts of Admiralty Act 1890 (UK) was the Commonwealth and not each of its constitutent States. Thus Chief Justice Knox CJ and Justice Gavan Duffy stated:

[f the first part of the definition stood alone, there could, we think, be no doubt that each Aus­ tralian State and the Commonwealth as a whole would be a ‘part of Her Majesty’s dominions’, and therefore a British possession. As the definition stands, we think the Commonwealth is a

British possession within the second part of the definition. It is clear that parts of Australia, namely, the States, are under both a central and a local legislature.4

1. See Mcllwraith McEacharn Lid v Shell Company o f Australia Ltd (1945) 70 CLR 175, 189 (Latham CJ). 2. See the note to cl 2 of the Colonial Courts of Admiralty Bill contained in the memorandum set out in DP O’Connell & A Riordan, Opinions on Imperial Constitutional Law, Law Book Co, Melbourne, 1971, 234, 235. 3. (1925) 34 CLR 420. 4. id, 425-6.

18 / Civil Admiralty Jurisdiction

The High Court thus decided that the ‘British possession’ was the Commonwealth, de­ spite the fact that the combined effect of s 16 and the First Schedule of the 1890 Act was to name New South Wales and Victoria as British possessions, where the operation of the Act was to be delayed.5 It is not clear why it was not argued that these provisions were sufficient evidence of intent to the contrary within the meaning of the Interpretation Act

1889 (UK).6 7 The point is now of no significance since the decision in the The Katherine Mackall7 has been followed in later cases.8 Merely because the Commonwealth is the ‘British possession’ does not mean that State courts do not qualify as Colonial Courts of Admiralty under the Act.9 They are courts ‘in’ the British possession, the Commonwealth, which is all that s 2(1) requires. Since McArthur v Williams l0, there can be no doubt that State courts of original unlimited civil jurisdiction qualify as Colonial Courts of Admir­ alty.

25. ‘Original Unlimited Civil Jurisdiction’. The Colonial Courts of Admiralty Act 1890 (UK), s 15 defines the expression ‘unlimited civil jurisdiction’ to mean ‘civil jurisdiction unlimited as to the value of the subject matter at issue, or as to the amount that may be claimed or recovered’. The Act is not confined to courts of original ‘unlimited’ civil juris­ diction’ existing at the time when it came into force but includes later creations — what Chief Justice Latham called ‘future possible’ courts of original unlimited civil jurisdic­ tion.11 The question is, then, which Australian courts now qualify as courts of original un­ limited civil jurisdiction under the Act.

• The High Court and State and Territory Supreme Courts. The first courts to qualify as Colonial Courts of Admiralty in Australia were the Supreme Courts of Queens­ land, Tasmania, South Australia and Western Australia. Before federation, each of these Colonies was a ‘British possession’ under the Act.12 After federation, their Supreme Courts continued to be Colonial Courts of Admiralty because they were courts of original unlimited jurisdiction in the ‘British possession', the Common­ wealth. The High Court became a Colonial Court of Admiralty when it came into existence pursuant to the Judiciary Act 1903 (Cth). If effect is given to s 16 of the Colonial Courts of Admiralty Act 1890 (UK) and to the Imperial Order in Council made under s 14, the Supreme Courts of New South Wales and Victoria did not become Colonial Courts of Admiralty until 1 July 1911.13 The Supreme Courts of each of the Territories, including both the Australian Capital Territory and the

Northern Territory and the various ‘external’ Territories (Norfolk Island, Cocos (Keeling) Islands and Christmas Island), became Colonial Courts of Admiralty at

5. See para 21.

6. In re McKehey [1906] VLR 304, 310 (Holroyd ACJ). See also McArthur v Williams (1936) 55 CLR 324, 346-7 (Starke J). 7. (1924) 34 CLR 420. 8. Mcllwraith McEacharn Ltd v Shell Company o f Australia Ltd (1945) 70 CLR 175; Lewmarine Pty Ltd v

The Ship Kaptayanni’[ 1974] VR 465. 9. But cf JG Latham, Australia and The British Commonwealth. Macmillan, London, 1929, 108. 10. (1936) 55 CLR 324. 11. Mcllwraith McEacharn Ltd v Shell Company o f Australia Ltd (1945) 70 CLR 175, 192.

12. McArthur v Williams ( 1936) 55 CLR 324, 360-1. 13. It has been argued that the effect of s 2(1) of the Act was that the Supreme Courts of these two States qualified under the Act in 1901, since they then became courts of original "unlimited civil jurisdiction’ in ‘the British possession’, the Commonwealth: see CA Ying, ’Colonial and Federal Admiralty Jurisdiction’

(1981) 12 Fed LR 234, 252. The argument flies in the face of the express terms of s 16 of the Act: generalia specialibus non derogant.

Australian Courts Exercising Admiralty Jurisdiction / 19

the time each was established.14 All these Courts continue to qualify as Colonial Courts of Admiralty under the 1890 Act.15 • The Federal Court of Australia. It is possible that other Australian courts are courts of ‘original unlimited civil jurisdiction’ for this purpose. For example, the Federal

Court may well be a Colonial Court of Admiralty depending on the meaning to be given to s 19(1) of the Federal Court of Australia Act 1976 (Cth).16 The Federal Court, by s 5(1) of that Act, is a superior court of law and equity and is ‘a court of law in a British possession’ within the meaning of s 2(1) of the 1890 Act. Section

19(1) of the Federal Court of Australia Act 1976 (Cth) states that the Federal Court ‘has such original jurisdiction as is vested in it by laws made by the Parliament’. Thus, by virtue of s 86 of the Trade Practices Act 1974 (Cth) the Federal Court has jurisdiction under s 82(1) of that Act to hear actions for damages for loss suffered

by conduct in contravention of Pt IV or V of the Act. This jurisdiction is, within the terms of the definition in s 15 of the 1890 Act, ‘unlimited ... as to the amount that may be claimed or recovered’. It is certainly ‘civil’ jurisdiction. From this it may well follow that the Federal Court is a Colonial Court of Admiralty under the

1890 Act.17 On the other hand it is possible to construe s 19(1) as limiting the Court’s original jurisdiction to matters that arise under Commonwealth law18, in which case s 2(1) of the Colonial Courts of Admiralty Act 1890 (UK) would be ex­ cluded. The difficulty with this view is that the (apparently similar) provisions of

s 75 and 76 of the Constitution, providing for the original jurisdiction of the High Court, have not been read that way. It would seem that the Federal Court may be a Colonial Court of Admiralty even though its ‘unlimited civil jurisdiction’ is con­ fined to particular matters only. The Colonial Courts of Admiralty Act 1890 (UK) draws no distinction between courts which have general unlimited civil jurisdiction and courts which have unlimited civil jurisdiction in particular matters only.

• Other courts. On this basis, it could also be argued that other courts — even inferior or subordinate courts — with unlimited civil jurisdiction as defined in particular matters qualify as Colonial Courts of Admiralty. For example, some superior or even intermediate courts in Australia have unlimited civil jurisdiction in limited

classes of case (eg personal injuries).19 Another example is the Land and Environ­ ment Court of New South Wales which under the Land and Environment Court Act 1979 (NSW) has unlimited civil jurisdiction to hear specified valuation, plan­ ning and environment cases.20 A similar argument could perhaps be maintained

with respect to the unlimited civil jurisdiction of the Family Court of Australia un­ der the Family Law Act 1975 (Cth). It has not yet been decided whether such statu­ tory courts qualify as Colonial Courts of Admiralty under the 1890 Act. The pos-14. See Mcllwraith McEacharn Ltd v Shell Company o f Australia Ltd (1945) 70 CLR 175, 192. See also Dal- gety and Co Ltd v Aitchison: The Rose Pearl’ (1957) 2 FLR 219. 15. ACTLRC, Report on Imperial Acts in Force in the Australian Capital Territory, Canberra, 1973, 27, 55 is probably incorrect in saying that the ACT Supreme Court possesses admiralty jurisdiction by virtue of the Australian Capital Territory Supreme Court Act 1933 (Cth) s 11 independently of the Colonial Courts of Admiralty Act 1890 (UK). Whatever jurisdiction was possessed by the NSW Supreme Court on 1 January 1911 is picked up by s 11. But on that date the NSW Supreme Court had no admiralty jurisdic­ tion: Bennett (1974) 153, 164. Admiralty jurisdiction was exercised in NSW exclusively by Vice Admiralty courts until 1 July 1911. 16. See generally BH McPherson ‘Admiralty Jurisdiction and the Federal Court’ (1981) 55 ALJ 71; J Craw­ ford, ‘Admiralty Jurisdiction in Australia: The Australian Law Reform Commission’s Reference’ (1983) 1(2) M L A A N Z J4, 11. 17. McPherson (1981) 76. 18. DJ C remean, Jurisdiction in Admiralty in Australia, Monash Uni, Ph D thesis, 1980, 55 n 33. 19. eg District Court of Western Australia Act 1969 (WA) s 50(2). 20. The Court is declared to be a superior court of record. Its judges have the same status and tenure as Su­ preme Court judges: Land and Environment Court Act 1979 (NSW) s 5, 9. cf Ying (1981) 255.

20 / Civil Admiralty Jurisdiction

ition is accordingly unclear, though in practice it would no doubt be manifestly in­ convenient for admiralty cases to be brought before courts such as the Land and Environment Court. What is clear is that the formula by which the 1890 Act selects the courts to exercise admiralty jurisdiction is imprecise, inconvenient, and in need of reform.

26. The Effect of a Declaration under Section 3. Section 3(a) of the Colonial Courts of Admiralty Act 1890 (UK) provides that: The legislature of a British possession may by any Colonial Law (a)declare any court of un­ limited civil jurisdiction, whether original or appellate, in that possession to be a Colonial

Court of Admiralty, and provide for the exercise by such court of its jurisdiction under this Act, and limit territorially, or otherwise, the extent of such jurisdiction ...

Cases such as McArthur v Williams21 and Union Steamship Company o f New Zealand Ltd v The Ship ‘Caradale’12 make it clear that a declaration enacted under this section speci­ fying one court has the effect of confining the jurisdiction conferred by the Act to that court. Section 2(1) speaks in the alternative of courts of ‘original unlimited civil jurisdic­ tion’ and courts declared under the Act to be Colonial Courts of Admiralty. Courts of the former type do not qualify under the Act if there are in existence courts of the latter type.

By s 3 of the Judiciary Act 1914 (Cth), in purported exercise of the power in s 3(a), the Commonwealth amended the Judiciary Act 1903 (Cth) by inserting s 30A. This declared the High Court ‘to be a Colonial Court of Admiralty within the meaning of the Imperial Act known as the Colonial Courts of Admiralty Act, 1890’. For the duration of that law, if it was valid2 1 2 2 23, no other court in Australia possessed the jurisdiction of a Colonial Court of Admiralty. However a further amendment to the Judiciary Act in 193924 revoked the declaration, putting an end to the doubts which it had created.25 The only other attempt in Australia to rely on the power contained in s 3(a) of the 1890 Act was s 17(1) of the Su­ preme Court Act 1935 (WA) which declared the Supreme Court ‘to be a Colonial Court of Admiralty within the meaning and for the purposes of the Colonial Courts of Admir­ alty Act, 1890’. This provision was repealed in 1971, but it is extremely doubtful whether it was ever valid. As Justice Wanstall pointed out in R v Commissioner for Transport, ex parte Cobb & Co Ltd,

It may be that for the purposes of s 3(a), the context requires that the power of declaration be restricted to the Commonwealth Parliament, so as to avoid the difficulties which would arise from s 2(1) if a single State Parliament were to declare the Supreme Court of its State a Col­ onial Court of Admiralty.26 27. The Statute of Westminster 1931 (UK). The Statute of Westminster 1931 (UK) s 6, adopted by the Commonwealth with effect from September 193927, provides:

Without prejudice to the generality of the foregoing provisions of the Act, s 4 of the Colonial Courts of Admiralty Act, 1890 (which requires certain laws to be reserved for the signification of His Majesty’s pleasure or to contain a suspending clause), and so much of s 7 of that Act as requires the approval of His Majesty in Council to any rules of Court for regulating the prac-21. (1936) 55 CLR 324. 22. (1937) 56 CLR 277. 23. Isaacs J considered it was not valid ( John Sharp & Sons Ltd v The Ship Katherine MackalV (1924) 34

CLR 420, 429) because the Act purporting to insert it was ‘strictly speaking' a reserved Bill under s 4 of the Colonial Courts of Admiralty Act 1890 (UK) which did not satisfy the requirements of s 60 of the Constitution in that the Royal Assent had been notified outside the two year period mentioned in s 60. 24. Judiciary Act 1939 (Cth) s 3. 25. At least so far as Australia was concerned. The point arose in the PNG Supreme Court in The Ship 'Fed­

eral Huron' v OK Tedi Mining Ltd. unreported, 20 January 1986. The Court agreed with Isaacs J (n 23) on the point: transcript of judgment, 32. cf also Lewmarine Pty Ltd v The Ship Kaptayanni' [1974] VR 465, 467-8. 26. [1963] Qd R 547, 577. s 17 was repealed by the Supreme Court Act Amendment Act 1971 (WA) s 3. 27. Statute of Westminster Adoption Act 1942 (Cth) s 3.

Australian Courts Exercising Admiralty Jurisdiction / 21

tice and procedure of a Colonial Court of Admiralty, shall cease to have effect in any Domin­ ion as from the commencement of this Act.

It has been assumed without much argument that s 6 allowed the States as well as the Commonwealth to make rules of court for admiralty matters without following the pro­ cedures set out in the 1890 Act.28 The extent (if any) to which s 6 allowed the States to

proceed under s 4 of the 1890 Act to affect ‘the jurisdiction of or practice or procedure in any’ Colonial Court of Admiralty has not been explored.29 These questions have been rendered irrelevant for future State legislation by the enactment of the Australia Act 1986 (Cth) and its counterpart United Kingdom legislation, the Australia Act 1986 (UK).

28. Inferior Courts Exercising Admiralty Jurisdiction. The Colonial Courts of Admiralty Act 1890 (UK) s 3(b) provides that:

The legislature of a British possession may by any Colonial law ... (b) confer upon any inferior or subordinate court in that possession such partial or limited Admiralty jurisdiction under such regulations and with such appeal (if any) as may seem fit;

Provided that any such Colonial law shall not confer any jurisdiction which is not by this Act conferred upon a Colonial Court of Admiralty.

The only case in which this power was exercised is the Broome Local Court Admiralty Jurisdiction Act 1917 (WA). This confers upon the Local Court at Broome in Western Australia ‘such and the like admiralty jurisdiction as is possessed by the Supreme Court’ of that State over any claim by a seaman or master for wages and by a master for dis­

bursements providing, however, that the amount of the claim does not exceed one hun­ dred pounds and that the ship (whether British or foreign) in respect of which the claim is made does not exceed 150 tons burden and is, at the time when the action is commenced, within the State or its territorial waters thereof and north of the Tropic of Capricorn’.30

The jurisdiction it confers does not take any precedence over the jurisdiction possessed by the Local Court by virtue of s 91(1) of the Navigation Act 1912 (Cth). The Broome Lo­ cal Court Admiralty Jurisdiction Act 1917 (WA) is valid only if the Parliament of West­ ern Australia was in 1917 the ‘legislature of a British possession’ under s 3(b) of the Col­

onial Courts of Admiralty Act 1890 (UK). But for the presence of s 107 of the Constitu­ tion, there would be little difficulty in applying the definition of ‘British possession’ in s 18(2) of the Interpretation Act 1889 (UK) with the result that, in Australia, the legisla­

ture of the British possession to which s 3(b) refers, has, since 1900, been the Parliament of the Commonwealth. On this view, the Broome Local Court Admiralty Jurisdiction Act 1917 (WA) would be invalid. However, s 107 of the Constitution may operate so as to preserve in the Western Australian Parliament the power it undoubtedly had prior to

1901.31 The matter is of very limited significance, since the Commission has been in­ formed that the Broome Local Court has not exercised the jurisdiction under the 1917 Act in recent times. If the Broome Local Court Admiralty Jurisdiction Act 1917 (WA) is valid then the Local Court at Broome, as a court having jurisdiction in admiralty, would seem also to possess jurisdiction under s 449 of the Merchant Shipping Act 1894 (UK)

and under s 252, 328 and 385 of the Navigation Act 1912 (Cth).32

28. Swift & Co Ltd v The Ship 'Heranger' (1965) 82 W N(Ptl)(NSW) 540, 543; Lewmarine Pty Ltd v The Ship Kaptayanni’[ 1974] VR 465, 467; R W Miller & Co Ltd v The Ship Pattis' [1975] 1 NSWLR 704, 719-20. 29. See Ying (1981) 245-6 for a brief discussion. 30. s 3(2). Proceedings may be in rem or in personam : s 4. An appeal from the Local Court to the Supreme

Court of Western Australia is provided; s 9. 31. Ying (1981) 252-3, canvasses the point, arguing that s 107 does not have this effect. 32. See para 53-6 on these provisions. The Local Court at Broome may qualify both under s 328 (as a court in a State having admiralty jurisdiction) and s 318(1) (as a local court of a State within the meaning of

s 318(3)).

22 / Civil Admiralty Jurisdiction

Appellate Jurisdiction

29. Local Appeals. The Colonial Courts of Admiralty Act 1890 (UK) deals both with local appeals (s 5) and appeals to the Judicial Committee of the Privy Council (s 6). So far as ‘local appeals’ are concerned, s 5 provides that: Subject to the rules of court under this Act, judgments of a court in a British possession given

or made in the exercise of the jurisdiction conferred on it by this Act shall be subject to the like local appeal, if any, as judgments of the court in the exercise of its ordinary civil jurisdic­ tion and the court having cognizance of such appeal shall for the purpose thereof possess all the jurisdiction by this Act conferred upon a Colonial Court of Admiralty.

Section 15 defines the expression ‘local appeal’ to mean ‘an appeal to any court inferior to Her Majesty in Council’ and the expression ‘appeal’ to mean, ‘appeal, rehearing, or re­ view’. When read with s 15, s 5 was obviously ‘intended to carry out the main idea of the assimilation of the Admiralty jurisdiction to the ordinary civil jurisdiction of Colonial Courts by giving the same right of appeal or rehearing in an Admiralty cause as exists in an ordinary civil cause’.33 3 4 The right of local appeal is not limited to a single appeal, not­ withstanding that s 6 refers only to ‘a decision’ on local appeal. The High Court in Mcll-

wraith McEacharn Ltd v Shell Company o f Australia L td 34 held that each of successive appeals can be a local appeal. 30. Appeals to the Privy Council. Section 6(1) provides that: The appeal from the judgment of any court in a British possession in the exercise of the juris­

diction conferred by this Act, either where there is as of right no local appeal or after a deci­ sion on local appeal, lies to Her Majesty the Queen in Council.

This provision was an important part of the scheme of the 1890 Act, which conferred a wide admiralty jurisdiction on local colonial courts but sought to retain a degree of ‘central’ control in the form of the jurisdiction of the Privy Council on appeal. However within ten years of the passage of this Act a considerably more extensive power of local Australian control over Privy Council appeals was conferred by sections 73 and 74 of the Commonwealth Constitution. An appeal to the High Court from a court sitting as a Col­ onial Court of Admiralty would be a ‘local appeal’ within the meaning of s 5 of the Col­ onial Courts of Admiralty Act 1890 (UK).35 3 6 From the judgment given by the High Court on appeal, s 6 arguably gave a right of appeal to the Judicial Committee. However, under s 73 of the Constitution, the judgments of the High Court given in the exercise of its ap­ pellate jurisdiction are ‘final and conclusive’. As Justice Dixon pointed out in Mcllwraith McEacharn Ltd v Shell Company of Australia Ltd16, the Constitution is a later Imperial statute. If the ordinary rule of construction that a subsequent statute prevails over an earlier one is applied37, s 73 must be regarded as prevailing over s 6. The result is that s 6 did not confer appellate jurisdiction on the Judicial Committee from decisions of the High Court.38 The argument is now of historical interest only, with the abolition of all ap­ peals to the Privy Council from the High Court in 1975. The position with appeals to the Privy Council from the courts of the States was even more complex.39 Whether, before

33. See the note to cl 3 of the Colonial Courts of Admiralty Bill contained in the Memorandum set out in O'Connell & Riordan (1971) 239. 34. (1945) 70 CLR 175, 192, 206. 35. Though it would not necessarily be an appeal 'as of right’: cf Judiciary Act 1903 (Cth) s 35. If not ‘as of

right’, s 6 of the 1890 Act apparently conferred a right of appeal direct to the Privy Council from the State or Territory Supreme Court. 36. (1945) 70 CLR 175, 206. 37. cf Commonwealth v Limerick Steamship Company Ltd (1924) 35 CLR 69, 95-6. 38. cf Richelieu and Ontario Navigation Company (Owners o f S S Canada) v Owners o f S S Cape Breton [1907]

AC 112. See Ying (1981) 257-8. 39. See Z Cowen & L Zines, Federal Jurisdiction in Australia, 2nd edn, OUP, Melbourne, 1978, 231-2; Mcll­ wraith McEacharn Ltd v Shell Co o f Australia L td (1945) 70 CLR 175,210 (Dixon J).

Australian Courts Exercising Admiralty Jurisdiction / 23

the Australia Act 1986 (Cth) and the Australia Act 1986 (UK) came into force, there was a right of appeal under the Colonial Courts of Admiralty Act 1890 (UK) s 6 to the Privy Council from State Supreme Courts depended on whether the admiralty jurisdiction of State Courts is federal jurisdiction under s 39 of the Judiciary Act 1903 (Cth).40 Again this question has been rendered irrelevant by the abolition of all remaining Privy Council ap­ peals from Australia by the Australia Acts 1986.

The Effect of the Judiciary Act 1903 (Cth) s 39

31. A Coexisting Federal Jurisdiction? The difficulties with the Colonial Courts of Ad­ miralty Act 1890 (UK) are compounded by the unresolved question whether the Judiciary Act 1903 (Cth) s 39 confers admiralty and maritime jurisdiction upon State courts. This interpretation may be arrived at by reading s 39 with s 38.41 4 2 In respect of certain matters,

s 38 gives the High Court jurisdiction exclusive of that of the courts of the States. None of the matters involves admiralty or maritime jurisdiction as such. So far as the High Court’s jurisdiction is not exclusive under s 38, s 39(2) provides that, subject to certain conditions, State courts:

shall within the limits of their several jurisdictions, whether such limits are as to locality, sub­ ject matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it.

Since, by s 76(iii) of the Constitution, ‘Admiralty and maritime jurisdiction’ is a matter in respect of which the Commonwealth can make laws conferring original jurisdiction upon the High Court, it would seem to follow that s 39(2) vests in State courts the jurisdiction

mentioned in s 76(iii).

32. Consequences of Concurrent Federal Jurisdiction. To the extent that the jurisdiction in s 76(iii) is coextensive with the jurisdiction conferred by the 1890 Act, a serious ques­ tion of inconsistency or repugnancy between the two arises. In Mcllwraith McEacharn Ftd v Shell Company o f Australia Ltd*1, Justice Dixon expressed the view that s 39 should

not be construed as conferring federal jurisdiction in admiralty matters, at least to the ex­ tent that jurisdiction in those matters is conferred by the Colonial Courts of Admiralty Act 1890 (UK). In a passage which is in many ways difficult to interpret he said:

When s 39 was passed, the Statute of Westminster 1931 (Imp) had not been enacted and, hav­ ing regard, not only to the many inconveniences that would result, but also to the conflicts with the provisions of the Colonial Courts of Admiralty Act which would ensue from an at­ tempt to make the jurisdiction thereunder of this Court exclusive of that of the Supreme Courts and then to invest them with Federal jurisdiction of the same character as would other­

wise belong to them as Colonial Courts of Admiralty, 1 do not think that the general words of s 39 should be interpreted as applying to the special case of the jurisdiction of Colonial Courts of Admiralty.43

This passage was considered by the High Court in China Ocean Shipping Co v State of South Australia, 4 4 That case involved a number of questions concerning the applicability of the limitation of liability provisions in the Merchant Shipping Act 1894 (UK). Justices Gibbs, Stephen and Aickin held that the provisions of the Merchant Shipping Act 1894 (UK) applied geographically to South Australia but that the Crown in right of that State

40. Whether this is the case is discussed in para 31-3. 41. See KA Aickin, Note (1967) 41 A LJ 244, and especially Cowen and Zines (1978) 63-72, 228-33. 42. (1945) 70 CLR 175. 43. id, 210.

44. (1979) 145 CLR 172.

24 / Civil Admiralty Jurisdiction

was not bound by them in terms or by necessary implication.45 On the further question whether those provisions were applicable by virtue of s 64 of the Judiciary Act 1903 (Cth), Justices Stephen and Aickin held that s 64 applied only in proceedings in which a court was exercising federal jurisdiction.46 In separate judgments, they held that in the present case the court had been exercising jurisdiction conferred by the Merchant Ship­ ping Act 1894 (UK) rather than any of the jurisdiction conferred by s 39 of the Judiciary Act 1903 (Cth).47 Although he recognised that the jurisdiction mentioned in s 76 (iii) had been invested in State courts by s 39, Justice Stephen considered that no simultaneous di­ vesting of their previous jurisdiction on the subject matter of ‘Admiralty and maritime jurisdiction’ had taken place: ‘There was thus in 1903 an investing of State courts with

new federal jurisdiction unaccompanied by any divesting of their old jurisdiction’.48 As to the problem before him, Justice Dixon’s view in Mcllwraith McEacharn Ltd v Shell Company o f Australia Ltd was precisely applicable: [F]or the reasons which his Honour ... stated, s 39 is just as inapplicable to a State court’s Mer­

chant Shipping Act jurisdiction, as it is to its Colonial Court of Admiralty jurisdiction. Neither is affected by s 39 of the Judiciary Act. The general words of s 39(1) did not render either of those jurisdictions, possessed as they were by the High Court in consequence of Imperial grant, exclusive of the State court’s like jurisdiction (even were s 39(1) understood as extending to jurisdiction of the High Court conferred not by the Constitution and the Judiciary Act but by Imperial Act); nor did the general words of s 39(2) invest State courts with those jurisdic­ tions under the guise of federal jurisdiction. Likewise, even if the content of the truly federal jurisdiction in ‘Admiralty and maritime jurisdiction’ ... includes jurisdiction in respect of that

creature of exclusive Imperial statutory origin, the limitation suit, 39(2) did not invest that jur­ isdiction in State courts.49 Justice Aickin in substance agreed: ‘s 39(2) should not be construed as conferring federal jurisdiction on the State courts in repect of proceedings under those sections’.50 Although Justice Gibbs arrived at the same result as Justices Stephen and Aickin on this question, his view was that the proceedings at hand did not involve a suit to which a State was a party within the meaning of s 64. That being so, neither the construction of s 39 nor the possible ‘repugnancy between that section and the Colonial Courts of Admiralty Act if the words of the section were given their ordinary and natural meaning’ arose.51 He added, however, that he regarded those questions as ‘completely open’.52 Despite the views of Justices Stephen and Aickin (agreeing with that of Justice Dixon), the matter cannot be regarded as settled. Chief Justice Barwick said nothing on the point. Justice Gibbs regarded the questions as ‘completely open’. On the other hand Justice Murphy stated that the Colonial Courts of Admiralty Act 1890 (UK) ceased to operate in Aus­ tralia when the Constitution became effective and that decisions on the Colonial Courts of Admiralty Act 1890 (UK) to the contrary were ‘errors’53; undoubtedly he would regard s 39 of the Judiciary Act as covering the field. 33. Unresolved Issues. If the words of s 39 are given their ordinary and natural mean­ ing, then the jurisdiction in s 76 (iii) does appear to have been invested in the courts of the States. To the extent that s 76(iii) is coextensive with the jurisdiction conferred by the

45. id, 197, 200 (Gibbs J); 214, 223 (Stephen J); 240 (Aickin J). Barwick CJ held that the State was bound by those provisions of their own force: id, 191. 46. id, 223 (Stephen J); 244 (Aickin J). s 64 of the Judiciary Act 1903 (Cth) provides that in ‘any suit to which the Commonwealth or a State is a party, the rights of parties shall as nearly as possible be the same, and

judgment may be given and costs awarded on either side, as in a suit between subject and subject'. 47. id, 230 (Stephen J); 244 (Aickin J). 48. id, 227. 49. id, 229-30. 50. id, 244. 51. id, 204. 52. ibid. 53. id, 233.

Australian Courts Exercising Admiralty Jurisdiction / 25

1890 Act, it is hard to see how it can be said that s 39 does not purport to invest federal jurisdiction over those subjects in State courts. If federal jurisdiction over those matters has been purportedly invested in State courts, then it seems clear that that jurisdiction should be treated as inconsistent with any other jurisdiction with respect to the same mat­

ters.54 But this view presents difficulties, because s 39(2) was passed before the Statute of Westminster Adoption Act 1942 (Cth). It would seem to follow that (so far as ‘admiralty’ jurisdiction covered by the 1890 Act is concerned) s 39(2) is invalid under the Colonial Laws Validity Act 1865 (UK). As pointed out by Justice Aickin, the repugnancy seems to

take the acute form of the co-existence of two purportedly exclusive jurisdictions.55 The argument for invalidity gains support from Union Steamship Co of New Zealand Ltd v Commonwealth 56 5 7 5 8 , where provisions of the Navigation Act 1912 (Cth) were held invalid for repugnancy to the Merchant Shipping Act 1894 (UK). On the basis of the decisions in

Commonwealth v Limerick Steamship Company L td57 and Commonwealth v Kreglinger & Fernau L td58 it may be argued that since s 39(2) was passed under the Constitution, the jurisdiction it confers prevails over that conferred by the Colonial Courts of Admiralty Act 1890 (UK) because the Constitution is itself an Imperial enactment passed later than

the Colonial Courts of Admiralty Act 1890 (UK). Justice Murphy regarded those cases as having adopted the ‘correct’ approach.59 In both the validity of s 39(2)(a) of the Judiciary Act 1903 (Cth) was upheld notwithstanding the existence of previous inconsistent Im­ perial legislation. Justice Dixon’s approach in Mcllwraith McEacharn Ltd v Shell Com­ pany o f Australia L td60, on the other hand, avoids having to make any finding of incon­

sistency or repugnancy between s 39 of the Judiciary Act 1903 (Cth) and the Colonial Courts of Admiralty Act 1890 (UK) by reading s 39 as not extending to the jurisdiction of Colonial Courts of Admiralty. If s 39 does validly confer on State courts ‘Admiralty and maritime jurisdiction’, displacing the equivalent jurisdiction under the Colonial Courts of

Admiralty Act 1890 (UK) then the consequences are unclear. No doubt the substantive law to be applied in the exercise of that jurisdiction would be unchanged, but since (as will be seen) the scope of ‘Admiralty and maritime jurisdiction’ in s 76(iii) of the Consti­ tution is probably considerably wider than the scope of jurisdiction under the 1890 Act61,

it may be that State courts could be called on to exercise federal admiralty jurisdiction in novel situations.62 As in other contexts, the distinction between admiralty jurisdiction and substantive admiralty law is a difficult one to draw. What is clear is that these problems are tortuous and unnecessary. Obviously the enactment of appropriate legislation is

called for.

54. Felton v Mulligan (1971) 124 CLR 367, affirmed and applied in Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 31 ALR 161, 166 (Gibbs J), 174 (Stephen, Mason, Aickin, Wilson JJ). See also Ffrost v Steven­ son (1937) 58 CLR 528, 543. The reasoning in cases such as Lorenzo v Carey (1921) 29 CLR 243, 252 can now be seen to have been wrong. 55. China Ocean Shipping Co v State o f South Australia (1979) 145 CLR 172, 242. 56. (1925) 36 CLR 130. cf (1979) 145 CLR 172, 244 (Aickin J). 57. (1924) 35 CLR 69. 58. (1926) 37 CLR 393.

59. China Ocean Shipping Co v State o f South Australia (1979) 145 CLR 172, 235. 60. (1945) 70 CLR 175,210. 61. See para 70. 62. On Stephen J’s view (para 32) this could be the situation in any event, since he regarded ‘federal' admir­

alty jurisdiction as coexisting with jurisdiction under the 1890 Act. On any view, the High Court and Ter­ ritory Supreme Courts remain Colonial Courts of Admiralty under the 1890 Act.

26 / Civil Admiralty Jurisdiction

Summary

34. The Present Position. To summarise, the High Court, the Supreme Court of each State, and the Supreme Court of each Territory presently qualify as Colonial Courts of Admiralty under the 1890 Act. In addition it is possible that other superior courts estab­ lished by statute with original unlimited civil jurisdiction in particular matters also qual­ ify as Colonial Courts of Admiralty. This would include in particular the Federal Court. On the other hand, although there is power under s 3(b) of the 1890 Act to confer limited admiralty jurisdiction on lower courts, it is not clear whether this power can be exercised by the States or only by the Commonwealth. The validity of the Broome Local Court Ad­

miralty Jurisdiction Act 1917 (WA) is therefore doubtful. The 1890 Act provides for ap­ peals as of right to the Privy Council from the court which hears the final ‘local appeal’. This provision has been superseded by s 74 of the Constitution and Federal legislation under it, so that there is now no appeal in admiralty matters to the Privy Council from the High Court, the Supreme Court of a Territory, or (if it has jurisdiction under the 1890 Act) the Federal Court. Whatever the position before 1986, there is now no appeal to the Privy Council in admiralty cases from State Supreme Courts. But the scope of the admir­ alty jurisdiction of State Supreme Courts may be affected by whether their admiralty jur­ isdiction is formally ‘federal jurisdiction’ under s 39 of the Judiciary Act 1903 (Cth) or not. Whether this is so is completely unclear.

4. The Present Scope of Admiralty Jurisdiction in

Australia

35. Introduction. The history of admiralty jurisdiction in Australia was briefly outlined in chapter 2. That jurisdiction continues to depend on the Colonial Courts of Admiralty Act 1890 (UK). However the 1890 Act does not itself specify which matters are within jurisdiction: it merely incorporates, by s 2(2), the then existing admiralty jurisdiction of the English High Court. This chapter describes the content of Australian admiralty juris­ diction (original and appellate) under the 1890 Act and under related Imperial, Com­ monwealth and State legislation.

36. The Effect of Section 2(2) of the 1890 Act. Section 2(2) of the 1890 Act vests in Col­ onial Courts of Admiralty the admiralty jurisdiction of the High Court in England ‘whether existing by virtue of any statute or otherwise’. This jurisdiction is to be exercised over ‘the like places, persons, matters, and things’ and ‘in like manner and to as full an extent’ as the jurisdiction of the High Court in England. The effect of s 2(2) was consid­

ered by the Privy Council in The Yuri Maru, The Woron. where it held that the jurisdic­ tion of Colonial Courts of Admiralty is fixed as at 1890 rather than being ambulatory, and that statutory enlargement of the jurisdiction of the High Court in England in 1925 did not therefore enlarge the jurisdiction of courts of admiralty abroad.1 The Supreme Court of Judicature (Consolidation) Act 1925 (UK) had not been requested by the Do­

minion of Canada to apply to Canada and contained no words indicating that it was in­ tended to apply there. Speaking generally of the jurisdiction conferred by the 1890 Act, Lord Merrivale said that:

[o]n the whole, the true intent of the Act appears to have been to define as a maximum of jurisdictional authority for the Courts to be set up thereunder, the Admiralty jurisdiction of the High Court in England as it existed at the time when the Act was passed.2

There can be no doubt that the decision represents the law in Australia. As Justice Pape said in Lewmarine Pty Ltd v The Ship Kaptayanni1 :

the jurisdiction which this Court derives from the Imperial Act as a Colonial Court of Admir­ alty is the Admiralty jurisdiction of the English High Court as it existed when the Imperial Act was passed, that is, in 1890.3

1. [1927] AC 906. It had earlier been decided in Bow. McLachtan & Co Lid v The Ship 'Camosun' [ 1909] AC 597 that, where the general powers of a court are limited, the conferral of jurisdiction under the 1890 Act does not enlarge those powers. If eg the court ordinarily lacks the power to issue orders for specific per­ formance, nothing in the 1890 Act allows it to issue such orders when exercising its admiralty jurisdiction. 2. [1927] AC 906, 915.

3. [1974] VR 465, 468. cf Nagrint v The Ship Regis' (1939) 61 CLR 688; McUwraith McEacharn Lid v Shell Company o f Australia Lid (1945) 70 CLR 175; The Lorena [1973] 1 NZLR 507, 509; China Ocean Shipping Co v State o f South Australia (1980) 27 ALR 1,41-2. See too Tharros Shipping Corporation SA v The Own­ er o f the Ship Golden Ocean’ 1972 (4) SAf LR 316; BJ McGrath, 'Admiralty Jurisdiction and the Statute of Westminster’ (1932) 6 ALJ 160, 215.

28 / Civil Admiralty Jurisdiction

The reason why ‘existing’ in s 2(2) has been interpreted to mean existing as at 1890 is, as the Privy Council itself pointed out, that treating it as meaning ‘existing from time to time’ would leave open the possibility of s 2(2) giving unrequested laws an unintended ef­ fect in the Dominions.4

The Scope of Admiralty Jurisdiction

37. The Territorial Scope of Admiralty Jurisdiction. Section 2(2) preserves in Australia provisions of the Admiralty Court Act 1840 (UK) and the Admiralty Court Act 1861 (UK) which conferred jurisdiction upon the High Court in England in 1890. To over­ come the restriction placed upon the jurisdiction by the statutes of Richard II (which confined the jurisdiction to matters arising upon the high seas and excluded from the jur­ isdiction any matter arising within the body of a county5), a number of those provisions are expressed to confer jurisdiction over matters ‘whether or not arising within the body of a county or upon the high seas’. The expression ‘high seas’ does not have its interna­ tional law meaning of the open sea beyond territorial waters, but referred to all waters

seaward of the low-water mark as it followed the indentations of the coast.6 An exception was those indentations in the form of a bay, a gulf or an estuary inter fauces terrae where the Admiral’s Court had no jurisdiction ‘because parts of the sea so circumscribed were

held to be within the body of the adjacent county or counties’.7 Under s 2(4) of the Col­ onial Courts of Admiralty Act 1890 (UK), where a matter does arise upon the high seas, it seems that no jurisdiction concurrent with the jurisdiction conferred by that Act can be exercised, at least by courts of the States.8 38. Existing Heads o f Admiralty Jurisdiction. In addition to the jurisdiction conferred by s 2(2) of the 1890 Act, jurisdiction is also conferred on Colonial Courts of Admiralty by a number of later Acts. A third category of jurisdiction, under s 2(3) of the 1890 Act, is that previously conferred on Courts of Vice Admiralty by other United Kingdom Acts. These include Acts dealing with criminal matters such as the Piracy Act 1850 (UK), ss 2 and 5; the Foreign Enlistment Act 1870 (UK), ss 449, 472; the Slave Trade Act 1873 (UK) and the Pacific Islanders Protection Act 1875 (UK).9 So far as civil admiralty jurisdiction is concerned, the effect of the 1890 Act and subsequent legislation is to confer jurisdiction over a range of matters, outlined in the following paragraphs. These fall into three basic classes;

• jurisdiction conferred or extended by the 1840 and 1861 Acts; • the ‘inherent’ jurisdiction of the Admiralty Court unaffected by statute; • jurisdiction conferred by subsequent statutes. These will be dealt with in turn.

4. The Yuri Maru, The Woron [1927] AC 906, 915. 5. See para 9.

6. See eg The Mecca [1895] P 95, 107 (Lindley LJ). 7. R v Keyn (1876) 2 Ex D 63, 162 (Cockburn CJ). 8. The Admiralty Court Act 1840 (UK) and the Admiralty Court Act 1861 (UK) would by virtue of the op­ eration given to them by the Colonial Courts of Admiralty Act 1890 (UK), seem to cover the field and

render any laws of the States enacted before 1986, which cover the same field, void to that extent: see Colonial Laws Validity Act 1865 (UK) s 2. The Colonial Courts of Admiralty Act 1890 (UK) s 2(4) uses the expression ‘outside the body of a county'. In Australia a matter arising upon the "high seas’ arises out­ side the body of a county: see R v Keyn (1876) 2 Ex D 63, 162-3; Union Steamship Company o f New Zea­ land Lid v Ferguson (1969) 119 CLR 191, 200, 208. The Australia Act 1986 (Cth) and the Australia Act

1986 (UK) freed the States from the fetters of the Colonial Laws Validity Act 1865 (UK). But laws invalid on grounds of repugnancy before 1986 were not validated by those Acts, although the States now have power to validate them by new legislation. 9. Criminal admiralty jurisdiction is not dealt with in this R eport: see para 7.

The Present Scope o f Admiralty Jurisdiction in Australia / 29

Statutory Jurisdiction as at 1890

39. Ship Mortgages. This extends to claims by a mortgagee10 1 1 in respect of

• any mortgage of a ship or vessel, provided that the ship or vessel is or its proceeds are already under arrest"; • ‘any Mortgage duly registered whether the Ship or the proceeds thereof be under A r r e s t o r not.12 1 3

Thus claims brought by mortgagees in respect of unregistered or equitable mortgages (whether of local or foreign ships) are only within jurisdiction in actions already com­ menced in rem.u Before 1981, a ship could only be arrested by a mortgagee if it was a British ship, because under Part I of the Merchant Shipping Act 1894 (UK) only mort­

gages of British ships could be registered.14 The Shipping Registration Act 1981 (Cth) s 4 repealed Part I of the 1894 Act for Australia and introduced for the first time an Austral­ ian form of ship registration, including the registration of mortgages. The replacement of Part I of the 1894 Imperial Act by the 1981 Australian Act may have created unintended difficulties in relying on s 11 of the Admiralty Court Act 1861 (UK) in respect of regis­ tered mortgages. It is not clear that the reference in s 11 to mortgages registered under the

Merchant Shipping Act 1854 (UK) includes mortgages registered under the 1981 Act15: if not, then the jurisdiction of Australian Colonial Courts of Admiralty over registered mortgages had inadvertently been removed. This result was retrospectively avoided by the Shipping Registration Amendment Act 1984 (Cth), s 29 of which inserted new s 94A in the 1981 Act:

Section 11 of the Imperial Act known as the Admiralty Court Act 1861 shall have effect and shall be deemed since 26 January 1982 to have had effect as if references in that section to a mortgage duly registered according to the provisions of the Merchant Shipping Act 1854, in­

cluded references to a mortgage registered or deemed to have been registered under this Act.

It seems therefore that jurisdiction over mortgages where the ship is not already under ar­ rest extends only to Australian-registered ships. Under the 1981 Act only mortgages of such ships can be registered.16

40. Claims for the Building, Equipping or Repairing of a Ship. This extends to claims for the building, equipping or repairing of any ship, provided that the ship or its proceeds are under arrest at the time when the cause is instituted.17 Although jurisdiction over any such claim overlaps with jurisdiction over claims for the supply of necessaries, this head of jurisdiction is wider, in that a claim for the building, equipping or repairing of a ship may be brought whether or not the ship at the time was elsewhere than in the port to which it belonged.18 While the cleaning of a ship is not its ‘repairing’, it may be its ‘equip-

10. But not a mortgagor: Bow, Me Lachlan & Co Ltd v The Ship 'Camosun' [ 1909] AC 597, 609. 11. Admiralty Court Act 1840 (UK) s 3. 12. Admiralty Court Act 1861 (UK) s 11. At the time when s 3 of the Admiralty Court Act 1840 (UK) was en­ acted, the system of registered mortgages had not been introduced; it was introduced by the Merchant

Shipping Act 1854 (UK). The Admiralty Court Act 1861 (UK) s 11 was passed to take into account the changes made by the 1854 Act. 13. The Two Ellens (1871) LR 3 A & E 345; The Tagus [1903] P 44 14. Merchant Shipping Act 1894 (UK) s 31 read with s 2. 15. It was possible to read s 11 of the 1861 Act as applying to the Merchant Shipping Act 1894 because of the

provisions of the Interpretation Act 1889 (UK) s 38(1). But it is doubtful whether s 38(1) applies to Com­ monwealth Acts. See MJ Calder,’Note’ (1983) 1(1) M LA A N Z Journal 12. 16. s 38(1) read with s 12, 34. It is true that s 94A uses the term ‘included', but given the 1981 Act’s repeal of Part I of the 1894 Act for Australia, a mortgage registered under the 1894 Act after 1981 can hardly be

said to be ‘duly registered’ as a matter of Australian law. 17. Admiralty Court Act 1861 (UK) s 4. 18. cf Admiralty Court Act 1861 (UK) s 5.

30 / Civil Admiralty Jurisdiction

ping’, because it is made fit for the performance of its primary function of carrying cargo.19 41. Necessaries. This extends to claims for ‘necessaries’ supplied to:

• foreign ships or sea-going vessels, whether supplied within the body of a county or upon the high seas20; • ships at the time elsewhere than in the port to which they belong unless at the time when the cause is instituted an owner or part-owner of the ship is domiciled in

Australia.21

The expression ‘necessaries’ was explained by Chief Justice Abbott in Webster v Seekamp:

The general rule is, that the master may bind his owners for necessary repairs done, or sup­ plies provided for the ship ... [WJhatever is fit and proper for the service on which a vessel is engaged, whatever the owner of that vessel, as a prudent man, would have ordered if present at the time, comes within the meaning of the term ‘necessary’, as applied to those repairs done or things provided for the ship by order of the master for which the owners are liable.22

Things as diverse as anchors23, clothing24, provisions for the crew25 and money spent on them26 have been held to be necessaries. On the other hand, a broker’s commission on a charter party for a future voyage effected whilst the ship is at sea under another charter27, and the insurance of a ship28, have been held not to be necessaries.

42. Damage to Cargo. Section 6 of the Admiralty Court Act 1861 (UK) extends to claims by the owner, consignee or assignee of a bill of lading of goods carried into a port in Australia in any ship, for damage done to the goods by the negligence or misconduct of or for breach of duty or breach of contract on the part of the owner, master or crew of the ship, unless at the time when the case is instituted an owner or part-owner of the ship

is domiciled in Australia. It has been held that this provision should be construed broad­ ly, unaffected by any considerations as to whether there is any corresponding right of ac­ tion at common law29, to afford the utmost relief which the fair meaning of its language allows.30 Thus the word ‘carried’ is not interpreted to mean ‘imported’31 and goods may be said to have been ‘carried’ into a port even if brought into it only incidentally.32 Sec­ tion 6 applies to foreign as well as to British ships33, but does not extend to a claim for damages under a charter-party34 or to contracts of hire generally. In so far as jurisdiction is given over cases of breach of contract, s 6 has effect only in relation to breach of the contract contained in the bill of lading.35

19. Lewmarine Pty Ltd v 77i

184. Whether this can be said to represent the modern law may be open to doubt. 29. The Norway (1864) Br & L 226; 167 ER 347. 30. The Pieve Superiore (1874) LR 5 PC 482. 31. The Bahia (1863) Br & L 61; 167 ER 298. 32. The Pieve Superiore ( 1874) LR 5 PC 482. See also The Cap Blanco [1913] P 130. 33. The Ironsides ( 1862) Lush 458; 177 ER 205. 34. The Yuri Maru. The Woron [1927] AC 906. 35. Larsen v The Ship ‘Nieuw Hol!and'[ 1957] St R Qd 605.

The Present Scope of Admiralty Jurisdiction in Australia / 31

43. Damage Done to or by a Ship. This extends to claims for damage: • received by a ship or sea-going vessel whether at the time within the body of a county or upon the high seas36; or • done by any ship.37 ‘Damage’ can be ‘received’ without actual contact.38 However, jurisdiction over claims for damage ‘done’ by a ship requires a distinction to be drawn between damage simply sus­ tained on or in connection with a ship and damage inflicted by the ship as a thing ‘capable of causing harm’.39 It is only when the ship is the ‘active agent’ or ‘noxious in­

strument’ of the damage that the damage is ‘done’ by the ship.40 Thus, for example: when injury arises from some defect in the condition of the ship considered as premises or as a structure upon which the person injured is standing, walking or moving the ship is treated as no more than a potential danger of a passive kind, a danger to the user, whose use is the active cause of the injury.41 It is, however a different matter

where the injury is the result of the management or navigation of the ship as a moving object or of the working of the gear or some other operation.42 Damage may, of course, be ‘done’ to another ship43, to objects such as submarine cables44, or to a person45 (provided, however, apart from cases governed by s 262 of the Navigation Act 1912 (Cth), that the person does not die as a result.46) It does not matter that the damage is done in foreign inland waters or by a foreign ship to a foreign ship.47 Although pollution of the seas as such is not a claim within this head of jurisdiction, ‘damage’ nonetheless may be found to exist as a result, for example, of the jettisoning of oil overboard.48 44. Master's and Seamen's Wages and Master’s Disbursements. This extends to claims by

• a seaman of any ship for wages earned on board the ship whether due under a spe­ cial contract or otherwise; and

36. Admiralty Court Act 1840 (UK) s 6. 37. Admiralty Court Act 1861 (UK) s 7. 38. The Industrie (1871) LR 3 A & E 303 (breach of duty which results in damage to ship). 39. Nagrint v The Ship 'Regis’( 1939) 61 CLR 688, 693.

40. id, 698. 41. id, 700 (Dixon J). 42. ibid. See also Union Steamship Company o f New Zealand Ltd v Ferguson (1969) 119 CLR 191. 43. Nagrint v The Ship ‘Regis' ( 1939) 61 CLR 688, 696.

44. The Clara Killam (1870) LR 3 A & E 161. See also Submarine Telegraph Act 1885 (UK) s 6(5); Parker v Commonwealth (1965) 112 CLR 295, 298. 45. Nagrint v The Ship Regis’ (1939) 61 CLR 688, 696. Note that apart from the situations governed by s 59A of the Navigation Act 1912 (Cth) the doctrine of common employment would still seem to be available as

a defence in admiralty: see Union Steamship Company o f New Zealand Ltd v Ferguson (1969) 119 CLR 191, 198-9. See also Groves v Commonwealth (1982) 56 ALJR 570. 46. See Smith v Brown (1871) 6 QB 729; The Vera Cruz (1884) 10 App Cas 59; Nagrint v The Ship Regis’ (1939) 61 CLR 688. cf The Guldfaxe (1868) LR 2 A & E 325; Le Vae. Ilott & Crooks v Steamship Giovanni

Amendola [1956] Ex CR 55. The Navigation Act 1912 (Cth) s 262 provides that any "enactment which con­ fers on any Court Admiralty jurisdiction in respect of damage shall have effect as though references to such damage included references to damages for loss of life or personal injury, and accordingly proceed­ ings in respect of such damages may be brought in rem or in personam’, cf s 5 of the Maritime Conven­ tions Act 1911 (UK) which corresponds to s 262 of the Navigation Act 1912 (Cth); s 5 of that Act is (by

virtue of s 9) not in force in Australia: see Nagrint v The Ship Regis’ (1939) 61 CLR 688. In that case Dixon J suggested that s 262 may be invalid for inconsistency with the proviso to s 3 of the 1890 Act: id, 696. 47. The Courier ( 1862) Lush 541; 167 ER 244. See also The Tolten [1946] P 135. 48. Outhouse and Himmelman v The Thorshavn [1935] 4 DLR 628; The Eschersheim [1976] 1 All ER 920 (HL).

See the general discussion on when oil pollution can be said to be done by a ship in DW Abecassis, The Law and Practice Relating to Oil Pollution from Ships, Butterworths, London, 1978, 160-3.

32 / Civil Admiralty Jurisdiction

• the master of any ship for wages earned on board the ship and for disbursements made on account of the ship.49 A seaman to whom wages are due has a right of action at common law against the owner or the master. Alternatively the seaman may sue in admiralty either in personam against the employer or in rem against the ship relying on the maritime lien for wages. The two remedies are alternatives50: if one avenue of recovery fails the other remains open.51 Jur­ isdiction extends to foreign seamen on board foreign ships, but when a foreign ship is sued, certain formalities are required as a preliminary to the action.52 The requirement that wages, to be recoverable in admiralty, should have been earned on board the ship was never interpreted strictly.53 Certain other sums are recoverable as wages: for ex­ ample, compensation for supplying bad provisions.54 The term ‘disbursements’ has been held to include ‘all proper expenditure made by the master on the ship’55 and, generally, includes those sums which would be recoverable as having been spent on necessaries.56 In addition to disbursements strictly so called, however, some claims of a wider nature have been allowed. Thus in The James Seddon 57, a master recovered as ‘disbursements’ the costs incurred by him in defending himself against a false charge of murder arising out of the performance of his duty as master. It is well established that ‘disbursements’ covers not only payments made but also a liability to make the relevant kind of payment in the future, notwithstanding that the Admiralty Court Act 1861 (UK) s 10 refers to ‘disburse­ ments made’.58 45. Salvage. The expression ‘salvage’ was defined by Sir Christopher Robinson in HMS Thetis to mean

the service which those who recover property from loss or danger at sea render to the owners with the responsibility of making restitution, and with a lien for their reward.59

The distribution of salvage jurisdiction in Australia is both complex and obscure. The Court of Admiralty certainly had jurisdiction with respect to salvage claims arising on the ‘high seas’ and relating to property capable of being made the subject of a salvage claim. However, this ‘inherent’ jurisdiction was subject to important limitations: it ex­ cluded ‘life salvage’ (salvage reward for the saving of life at sea) and did not apply to sal­ vage on the sea-shore or in waters inter fauces terrae.60 The latter defect was remedied (so far as ‘any ship or sea-going vessel’ was concerned) by the Admiralty Court Act 1840 (UK) s 6. The Wreck and Salvage Act 1846 (UK) s 40 (in conjunction with s 19) extended

49. Admiralty Court Act 1861 (UK) s 10. cf Navigation Act 1912 (Cth) s 91(l)(a)-(b). 50. The Bengal (1859) Swab 468; 166 ER 1220. For the definition of a maritime lien see para 16. 51. The Chieftain (1863) Br & L 212; 167 ER 340. 52. ES Roscoe, Admiralty Jurisdiction and Practice, 5th edn, G Hutchinson ed, Stevens, London, 1931, 245;

The Milford (1858) Swab 362; 166 ER 1167. See now New South Wales Admiralty Rules 1952, r 26(b); Queensland Rules of the Supreme Court, 0 7 r 11(b); South Australian Supreme Court Rules, 0 39 r 7(2)(b); Tasmanian Rules of the Supreme Court 1965, r 5(c); Victorian Admiralty Rules 1975, r 20(b); Western Australian Rules of the Supreme Court 1971, O 74 r 3(3)(f); and High Court Rules O 5 r 8(f), all of which require the local consul of the foreign state in which the ship is registered to be notified of the action. See further para 298. 53. The Halcyon Skies [1977] QB 14, 22, 31 (Brandon J). See eg The Arosa Star [1959] 2 Lloyd’s Rep 396

where sick leave and holiday pay were treated as ‘earned on board the ship' as required by s 10 of the 1861 Act. 54. Navigation Act 1912 (Cth) s 118(1). 55. The Feronia (1868) LR 2 A & E 65, 75, interpreting Admiralty Court Act 1861 (UK) s 10. 56. Roscoe (1931) 251. 57. (1866) LR 1 A & E 62. 58. Bristow v Whitmore (1861) 9 HL Cas 391; 11 ER 781; The Feronia (1868) LR 2 A & E 65. See also the

Navigation Act 1912 (Cth) s 94(2) which refers to ‘disbursements or liabilities'. 59. (1833) 3 Hagg 14, 48; 166 ER 312, 315. The reference to a ‘lien’ is a reference to the maritime lien for sal­ vage: see para 16. 60. DR Thomas, Maritime Liens, Stevens, London, 1980, para 257-9.

The Present Scope o f Admiralty Jurisdiction in Australia / 33

this jurisdiction to all other property which could be made the subject of a salvage claim. Section 19 of that Act also appeared to create a jurisdiction with respect to life salvage, although this is not clear.61 The uncertainty was remedied by the Merchant Shipping Act 1854 (UK) which re-enacted the salvage provisions of the 1846 Act with some variation.62 The High Court of Admiralty was given jurisdiction with respect to most salvage claims,

including life salvage: this applied ‘whenever any Ship or Boat is stranded or otherwise in Distress on the Shore of any Sea or Tidal Water situate within the limits of the United Kingdom’.63 The 1854 Act also re-enacted in similar language the earlier provisions ex­ tending the Admiralty Court’s salvage jurisdiction to matters arising within the body of a

county.64 The jurisdiction over life salvage with respect to British ships was made world­ wide by the Admiralty Court Act 1861 (UK) s 9: with respect to foreign ships, however, it was still necessary that life salvage services be rendered ‘within British waters’. This was the situation when the Colonial Courts of Admiralty Act 1890 (UK) was passed: its effect was to confer the life and property salvage jurisdiction under these Acts upon Colonial Courts of Admiralty. But subsequently the Merchant Shipping Act 1894 (UK) repealed the 1854 Act and s 9 of the 1861 Act, re-enacting their salvage provisions with some vari­

ations.65 That Act applied to Australia of its own force, but did not in so many words confer admiralty jurisdiction.66 To add to the confusion, the Navigation Act 1912 (Cth) it­ self enacted (with still further variations67) the salvage provisions of the 1894 Act.68 Like the 1894 Act, the 1912 Act made no specific reference to admiralty jurisdiction69 7 0 , but this

was in a context where Australian admiralty jurisdiction was not vested in Supreme Courts as such. Of the English situation at this time, Thomas comments The practice set by the Act of 1846 of making concurrent and distinct salvage jurisdictional provision alongside that contained in the Admiralty Court statutes was continued in the suc­

ceeding merchant shipping legislation and not until the Supreme Court of Judicature (Con­ solidation) Act 1925 were the two divergent sources of salvage jurisdiction converged into one: and this practice has been followed in the Administration of Justice Act 1956.’°

No such convergence of ‘the two divergent sources of salvage jurisdiction’ has occurred in Australia, though it is not clear what the consequences of this are. Such Australian dicta as exist in salvage cases tend to support the view that the Supreme Courts have both the inherent Admiralty jurisdiction (as expanded by s 9 of the 1861 Act or s 565 of the

61. cf FL Wiswall, The Development o f Admiralty Jurisdiction and Practice since 1800, CUP, Cambridge, 1970, 43-4. See The Fusilier (1865) Br & Lush 341, 344 (Dr Lushington). 62. The 1846 Act was at the same time repealed: Merchant Shipping Act Repeal Act 1854 (UK) s 4. 63. Merchant Shipping Act 1854 (UK) s 458 (provision for salvage), 460 (jurisdiction over salvage disputes).

Awards for life salvage were given priority over other salvage awards, but if no property was salved life salvors were only eligible for an ex gratia payment: s 459. 64. s 476. 65. Merchant Shipping Act 1894 (UK) s 544-6, 565. 66. SC White Pty Ltd v The Ship Mediterranean' [1966] Qd R 211, 216 (Wanstall J). 67. Thus s 317 of the 1912 Act substantially follows s 546 of the UK Act, but makes no reference to salvage of

'cargo or apparel". For general issues of the validity of Navigation Act provisions enacted before 1939 see para 56. 68. Navigation Act 1912 (Cth) s 315 (life salvage), 317 (salvage ‘on or near the coasts of Australia or any tidal water within Australia'), 328 (courts having salvage jurisdiction). There is no equivalent to s 565 of the

1894 Act.

69. s 328 refers to ‘the Supreme Court of every State, every Court in a State having Admiralty jurisdiction ...’, terminology that does not advance matters. 70. Thomas (1980) para 265. The current version of the UK provisions referred to is Supreme Court Act 1981 (UK) s 20(6), which provides that

The reference in sub-section (2)(j) to claims in the nature of salvage includes a reference to such claims for services rendered in saving life from a ship or an aircraft or in preserving cargo, apparel or wreck as, under sections 544 to 546 of the Merchant Shipping Act 1894, or any Order in Council made under section 51 of the Civil Aviation Act 1949, are authorised to be made in connection with a ship or an

aircraft.

34 / Civil Admiralty Jurisdiction

1894 Act) and the statutory salvage jurisdiction conferred by the 1894 Imperial Act and the Navigation Act 1912 (Cth).71 But the exact relationship between the various pro­ visions remains obscure. It remains to note that under the Navigation Act 1912 (Cth) sal­ vage claims lie against Government ships, that is, ships belonging to the Commonwealth, a State or a Territory.72 46. Towage and Pilotage. It is clear that before 1840 the Admiralty Court had inherent jurisdiction with respect to towage or pilotage on the high seas, a jurisdiction exercisable

in rem but apparently not giving rise to a maritime lien.73 The Admiralty Court Act 1840 (UK) s 6 expressly extended the Court’s jurisdiction for claims in the nature of towage arising within the body of a county. No reference was made to pilotage.74 A claim in the nature of towage means a claim in the nature of ‘ordinary’ towage, that is, towage which

is required only for expediting the progress of a ship or sea-going vessel not in distress.75 Any other form of towage should be regarded as salvage services.76 47. Title, Ownership, and Disputes between Co-owners. This extends to claims or ques­ tions arising

• as to the title to or ownership of a ship or vessel or its proceeds in any cause of possession, salvage, damage, wages or bottomry77; or • between all or any of the co-owners of a ship registered at a port in Australia con­ cerning the ownership, possession, employment or earnings of the ship or of a

share thereof.78 As between co-owners, these claims include suits for possession, actions of restraint and actions of co-ownership. The minority interest in a ship may claim that, without consent, the majority is about to send the ship on a voyage. By bringing an action of restraint, the minority may take out a warrant of arrest and have the ship detained until security is given for its safe return.79 The security required is a ‘stipulation’ by the majority, and suf­ ficient sureties to a bond, to pay the value of the minority interest in case the ship does not return. As soon as security is given the ship may sail, and it does so wholly at the risk, and for the profit, of the majority. A suit for possession may be in reverse form to an ac­ tion of restraint. The majority interest in a ship may wish to send the ship upon a voyage but may be unable to do so because the minority refuses to release possession. In such cases the majority may arrest the ship.80 Upon providing security for the ship’s safe return in an amount sufficient to cover the value of the minority interest, the majority will be

71. cf Burns Philp & Co Lid v Nelson & Robertson Ply Ltd (1958) 98 CLR 495, 502-3 (Taylor J ; the point was not argued on appeal); The Loretta v Bubb [1971] WAR 91, 93 (Nevile J); SG White Pty Ltd v The Ship 'Mediterranean' [1966] Qd R 211, 216-17 (Wanstall J). cf United Geographical Corporation v The Ship Tully Falls'l 1975] Qd R 85; Burley v The Ship Texaco Southampton'[1981] 2 NSWLR 238, 249 (Yeldham J) (reversed on other grounds, [1982] 2 NSWLR 336) where, without discussion, cases are heard in admir­

alty but based on the statutory salvage jurisdiction. 72. Navigation Act 1912 (Cth) s 329A-B. For the definition of ‘Government ship’ (which includes ships ‘demised or sub-demised to or in the exclusive possession o f a government) see s 6. 73. Thomas (1980) para 16-7 and cases there cited. 74. But in The Ambatielos; The Cephalonia [1923] P 68, Hill J was prepared to treat pilotage as equivalent, un­

der s 10 of the 1861 Act, to ‘seaman's wages’ (as to which see para 44). This overcomes the possible anom­ aly of lack of jurisdiction over pilotage within the body of a county, but at the expense of introducing an­ other, since it is clear that seamen’s wages do give rise to a maritime lien. On the possible classification of pilotage as a ‘necessary’ cf The Queen o f the South [1968] P 449 (Brandon J). 75. The Princess Alice (1849) 3 W Rob 138; 166 ER 914. 76. Fisher v The Ship Oceanic Grandeur' (1972) 127 CLR 312, 331; cf Burley v The Ship Texaco Southampton'

[1982] 2 NSWLR 336. See also The Medora (1853) 1 Sp Ecc & Ad 17, 18: 164 ER 10, 11. 77. Admiralty Court Act 1840 (UK) s 4. 78. Admiralty Court Act 1861 (UK) s 8; Colonial Courts of Admiralty Act 1890 (UK) s 2(3) proviso (a). 79. See Roscoe (1931) 54-7. The reference to co-owners is a reference to co-owners of shares in the ship, not

of shares in any company that owns the ship. 80. id, 46-8.

The Present Scope o f Admiralty Jurisdiction in Australia / 35

given possession and the ship may sail. A suit for possession may take other forms: for example, there is jurisdiction in respect of possession of a ship (including a foreign ship) wrongfully taken on the high seas.81 It may be incidental to determining such a claim to order rectification of the register.82 Under the Shipping Registration Act 1981 (Cth) s 59,

however, power to order rectification of the register is vested in the Supreme Courts of the States and Territories otherwise than as Colonial Courts of Admiralty.

Inherent Jurisdiction

48. Certain Maritime Contracts. This is one of a number of matters over which admir­ alty claimed inherent jurisdiction. It covers contracts, neither sealed nor ratified by deed, made and executed on the ‘high seas’ for a maritime consideration.83 However, in the ab­ sence of modern case law it is doubtful if the claim to this inherent jurisdiction would be sustained.84

49. Certain Torts at Sea. Certain claims for torts committed on the high seas were also asserted by admiralty to fall within its inherent jurisdiction.85 But, apart from the well recognised jurisdiction in collision cases, these claims have to be treated with caution.86 Though some jurisdiction beyond collision cases survives87, the difficulty of determining

its precise limits underlines the unsatisfactory way in which Australian admiralty jurisdic­ tion is presently defined.

50. Bottomry and Respondentia Bonds. Claims brought by a bond holder for the en­ forcement of a bottomry or respondentia bond were always recognised as distinctively admiralty matters.88 Such bonds were in the nature of contracts of loan given on the se­ curity of property, and they gave rise to a maritime lien. A bottomry bond pledged the keel or bottom of the ship (on the basis that ‘a part signifies the whole’) as well as the freight it would earn.89 A respondentia bond pledged only the cargo on board.90 Both bonds were founded on the necessity of financing the voyage through the bond. To estab­

lish the validity of the bond, the holder had to prove that repayment would be made upon the safe arrival of the ship.91 Necessity was proven where it was shown that the voy­ age could not be carried on without a bond.92 That could only be shown where the bor­ rowing took place at a foreign port93 and if it was proved that it was impossible to raise

the money in some other way.94 It might involve, for example, the master’s lack of per-

81. Baxter v Blanshard (1823) 3 Dow & Ry KB 177; 107 ER 374; The Pitt (1824) 1 Hagg 240; 166 ER 86; The Beatrice (otherwise The Rappahannock) (1866) 36 LJ Adm 9; The Annette; The Dora [1919] P 105. 82. cf Brand v Broomhall [ 1906] 1 KB 571. 83. A Browne, Compendious View o f the Civil Law and the Law o f Admiralty. 2nd edn, London, 1802, vol 2,

72.

84. Note the dismissive way in which Lord Esher MR commented on the claim in R v Judge o f the City o f London Court [1892] 1 QB 273, 293. See also the dicta of Lord Herschell in The Zeta [1893] AC 468, 482. The 1st edition of Halsbury's Laws o f England, vol 1, Admiralty, London, 1907, does not refer to con­ tracts in setting out the heads of admiralty jurisdiction. 85. Browne (1802) 110-11.

86. R v Judge o f the City o f London Court [1892] 1 QB 273, 292-3 (Lord Esher MR), cf The Zeta [1893] AC 468, 478-85 (Lord Herschell); Wiswall (1970) 125. 87. eg interference with salvage rights: The Tubantia [1924] P 78. 88. eg Stainbank v Shepard(1853) 13 CB 418; 138 ER 1262. 89. Wiswall (1970) 9-10; Roscoe (1931) 69. 90. ibid. See also The Cargo ex Sultan (1859) Swab 504; 166 ER 1235. 91. The Panama (1870) LR 3 PC 199. 92. Roscoe (1931) 13-4. 93. cf The Royal Arch (1857) Swab 269, 276; 166 ER 1131, 1135. 94. Roscoe (1931) 75.

36 / Civil Admiralty Jurisdiction

sonal credit.95 The lender was required be assured the necessity for the advance, but that would generally be presumed where the advance was made with the consent of the own­ ers of the ship or cargo.96 Both kinds of bond gave rise to a maritime lien, and, since there was no in personam liability of the owner or master, could only be enforced by ac­ tion in rem,97 There is no doubt that jurisdiction over bottomry and respondentia bonds continues to exist in theory. In practice, however, these bonds have long been replaced by other methods of financing voyages98, although occasional cases of bottomry still occur.99

51. Wreck at Sea. The inherent jurisdiction extends to claims for the return of property or for salvage for recovering property found as wreck at sea.100 Wreck at sea, together with pirate goods and spoils and certain kinds of Royal fish, were droits or perquisites of the Crown and generally assigned to the Admiral.101 Wreck, in this sense, includes jetsam (shipwreck and cargo and deck gear jettisoned to lighten a vessel in extremis), whether found as flotsam (floating on the surface) or as lagan (sunken but buoyed for retrieval) and derelicts (abandoned vessels).102 Only property found as wreck ‘at sea’ is within the inherent jurisdiction. Property found washed up on shore above high-water mark is wreck ‘of the sea’. Depending upon the circumstances of the find, property may be wreck at sea if it is found between high and low water marks.103 The Colonial Courts of Admir­ alty Act 1890 (UK) s 8 provides that, ‘save as is otherwise provided by any other Act’, droits and forfeitures in admiralty shall ‘be notified, accounted for, and dealt with in such a manner as the Treasury from time to time direct’. This inherent jurisdiction ‘is virtually vestigal’104 in Australia today because the whole question of wreck is dealt with by the

Navigation Act 1912 (Cth) s 294-314.105 This provides for the creation of an office of re­ ceiver of wreck. The receiver is given wide powers to deal with wreck and with claims for ownership of a wreck in the receiver’s possession.106 Disputes as to title may be resolved either ‘in the same manner as if it were a dispute as to salvage’ or, if any party wishes, ‘in any Court of competent jurisdiction’.107 Jurisdiction to determine claims for salvage in re­ spect of wreck is conferred in the same way as jurisdiction over other salvage matters.108 Various provisions dealing with the removal of wreck and derelicts can also be found in State shipping legislation, though without specific provision for jurisdiction.109 No pro­ vision is made in Australian legislation for jurisdiction over claims with respect to Royal

95. cf The Prince o f Saxe Cobourg (1838) 3 Moo PCC 1; 13 ER 1. 96. id, 76. 97. Jonson v Shepnev (1705) Holt KB 48; 87 ER 836; The Ripon City [ 1897] P 226, 245-6. 98. cf Wiswall (1970) 211; Thomas (1980) para 371-2. 99. The Conet [1965] I Lloyd’s Rep 195; Paschalis v The Ship Tona Maria [1975] I Cyprus LR 162. See DC

Jackson, Enforcement o f Maritime Claims, Lloyd's of London Press, London, 1985, 28-9. 100. See RG Marsden, ‘Admiralty Droits and Salvage — Gas Float Whitton, No ΙΓ ( 1899) 15 LQR 353. 101. Lord Warden o f Cinque Ports v The King in his Office o f Admiralty (1831) 2 Hagg 438; 166 ER 304. But not all derelicts are droits: see HMS Thetis (1833) 3 Hagg 228, 236; 166 ER 390, 393. 102. Wiswall (1970) 8. 103. R v Two Casks o f Tallow (\S31) 3 Hagg 294, 297-8; 166 ER 414, 416. 104. Australia and New Zealand Commentary on Halsbury's Laws o f England, Admiralty, Butterworths,

Sydney, 1976, para C350. 105. Note also the Historic Shipwrecks Act 1976 (Cth). The wreck provisions of the Merchant Shipping Act 1894 (UK) do not generally extend beyond the waters of the United Kingdom, see Robinson v Western Australian Museum (1977) 138 CLR 283, 308 (Gibbs J) 332 (Mason J). 106. Navigation Act 1912 (Cth) s 305. 107. id, s 311. 108. id, s 328. 109. See eg Queensland Marine Act 1958 (Qld) s 212; Marine Act 1958 (Vic) s 13; West Australian Marine Act

1982 (WA) s 71. See Victoria v Commonwealth (1937) 58 CLR 618 for the relationship between these types of provisions and the Navigation Act 1912 (Cth).

The Present Scope o f Admiralty Jurisdiction in Australia / 37

fish as such.110 But the substantive law has, in most if not all respects, been overtaken by legislation which operates without reference to admiralty jurisdiction.1"

52. Master’s Claims for Unpaid Freight. This extends to claims brought by a master for the enforcement of the possessory lien for unpaid freight attaching to the cargo in the master’s possession."2

Jurisdiction under Later Legislation

53. Miscellaneous Jurisdiction under Other Acts. Although almost all the jurisdiction of Colonial Courts of Admiralty is that conferred by the Colonial Courts of Admiralty Act 1890 (UK), it remained possible for later Acts (either Imperial or Australian) to confer further jurisdiction on those courts. This has (or may have) been done in only a few cases, which must be briefly mentioned.113

54. Merchant Shipping Act 1894 (UK). The Merchant Shipping Act 1894 (UK) s 449 and 472'14 may be said to confer jurisdiction in admiralty not just because the courts upon which they confer jurisdiction are admiralty courts but also because the matters they deal with used to fall within the jurisdiction of the High Court of Admiralty. Indeed, until the Merchant Shipping Act 1854 (UK) was repealed, they fell within the jurisdiction of Colonial Courts of Admiralty under s 2(2) of the Colonial Courts of Admiralty Act

1890 (UK).

• Section 449. Section 449 applies to the extent to which it is not superseded by s 252 of the Navigation Act 1912 (Cth). The application of s 252 is considered later."5 Section 449 confers upon Colonial Courts of Admiralty in Australia jurisdiction to declare as forfeited, to be disposed of as directed, certain dangerous goods carried on board British or foreign vessels.116 1 1 7 • Section 472. Section 472 confers upon Colonial Courts of Admiralty jurisdiction to

remove the master of a ship and to appoint a new master."7 55. Navigation Act 1912 (Cth). The Navigation Act 1912 (Cth) purports to confer juris­ diction over a number of matters falling within the recognised scope of admiralty juris­ diction but in terms which make the relationship between the two unclear or uncertain.

For example, s 318 and 328 enable certain claims in the nature of salvage, whether for re­ covering property found as ‘wreck’ or not, to be determined by State Supreme Courts, as

110. There does not appear to be any definitive statement of what types of fish are Royal" fish. One grant by the Crown of its droits refers to 'all royal fishes, such as sturgeons, grampuses, whales, porpoises, dol­ phins, riggs, and generally all other fishes of very large bulk or fatness': Lord Warden of the Cinque Ports v The King in his Office o f Admiralty (1831) 2 Hagg 438. 439-40: 166 ER 304, 304. 111. eg Whale Protection Act 1980 (Cth) s 36 (whales killed or taken in waters to which Act applies vest in

Commonwealth): Local Government Act 1962 (Tas) s 536A ('whales, porpoises, seals and other large sea creatures’ which are stranded below low-water mark to be removed by local authority; provision for re­ covery of costs via Justices Act 1959 (Tas)). 112. Browne (1802) 82. 113. In addition to the Acts listed here, the Prize Courts Act 1894 (UK) s 2(3) allows jurisdiction to be con­ ferred on Colonial Courts of Admiralty for the purposes of the Naval Prize Act 1864 (UK): see para 7. 114. Before 1981 jurisdiction was also conferred by s 76 of the Merchant Shipping Act 1894 (UK) (certain for­ feitures under Part I). That section, together with the rest of Part I of that Act, was repealed by the Ship­ ping Registration Act 1981 (Cth) s 3, 4 115. See para 177. 116. Dangerous goods' are goods of a dangerous nature, including explosives and various types of flammable

liquids (s 446(3)). 117. See generally The Royalist (1863) Br & L 46; 167 ER 291. s472, which corresponds to what was s 240 of the Merchant Shipping Act 1854 (UK), only applies to the extent that it is not superseded by s 385 of the Navigation Act 1912 (Cth). The ambit of the Navigation Act 1912 (Cth) is discussed in para 56.

38 / Civil Admiralty Jurisdiction

well as ‘every Court in a State having Admiralty jurisdiction’.118 Similarly, s 91(1) enables a claim by a seaman for wages or by a master for wages or disbursements to be brought before a Supreme Court or any other ‘Court having civil jurisdiction in respect of the amount of the claim’.119 Again the Act includes a reference to ‘any Court having Admir­ alty jurisdiction’.

56. The Ambit o f the Navigation Act 1912 (Cth). It was pointed out in para 54 that s 449 of the Merchant Shipping Act 1894 (UK) applies only to the extent that s 252 of the Navigation Act 1912 (Cth) does not apply. The position is similar with s 472 of the Mer­ chant Shipping Act 1894 (UK), which corresponds to s 385 of the Navigation Act 1912 (Cth).120 Generally speaking, the Navigation Act 1912 does not apply to

• ships belonging to an Australian or foreign defense force; • trading ships on voyages other than overseas voyages or inter-State voyages; • Australian fishing vessels proceeding on voyages other than overseas voyages; • inland waterways vessels; • pleasure craft.121 1 2 2

Specific issues of interpretation apart, there are continuing uncertainties about the validi­ ty of provisions of the Navigation Act 1912 enacted before the Statute of Westminster Adoption Act 1942 (Cth), and which cover the same field as paramount provisions of the Merchant Shipping Act 1894 (UK) applying to Australia. That the 1894 Act was capable of overriding such provisions of the 1912 Act was made clear in Union Steamship Co o f

New Zealand Ltd v Commonwealth. 122 Since 1942 many provisions of the Navigation Act 1912 (Cth) have been replaced or re-enacted, and no problem of ‘repugnancy’ can arise for them. Other provisions remain the same, or have merely been amended. In 1932 Kenneth Bailey commented that, notwithstanding the Statute of Westminster Act 1931 (UK):

so far as the Navigation Act is concerned, the High Court’s decision in the Union Steamship Co's case will still be good law unless and until the Commonwealth Parliament re-enacts the Navigation Act; or enacts that it is to be construed in relation to the Merchant Shipping Acts as though it had come into operation subsequently to the Statute of Westminister; or repeals any conflicting provisions of the Merchant Shipping Acts, or — as is in this case more prob­ able — supersedes both Acts by a new shipping code.123

No such re-enactment of the 1912 Act124 — still less its ‘more probable’ replacement by a new shipping code — has happened. It therefore remains the case that, as to the pre-1939 provisions of the Act:

the relation of the British Merchant Shipping Act to the Commonwealth Navigation Act ... is not susceptible of a summary, obvious answer, universally applicable.125

118. See para 45. 119. The Navigation Amendment Act 1980 (Cth) s 53 (not yet in force) adds claims by or on behalf of a per­ son for wages earned by the person under a contract of sea service: in effect this applies to service on off­ shore industry vessels and off-shore industry mobile units. 120. See further para 276. 121. These are defined in s 2. 122. (1925) 36 CLR 130; cf Hume v Palmer ( m b ) 38 CLR 441, 449 (Knox CJ), 452 (Isaacs J). 123. KH Bailey, ‘The Statute of Westminster’ (1932) 5 A L J 362, 365; cf HE Zelling, ‘Constitutional Problems

of Admiralty Jurisdiction’ (1984) 58 A L J 8, 8-9. 124. But the Navigation Act 1965 (Cth) did prospectively validate all subsisting regulations under the Act. 125. Hume v Palmer (1926) 38 CLR 441, 460 (Higgins J). For the possible invalidity of Navigation Act 1912 (Cth) s 262, see para 43, n 46.

The Present Scope o f Admiralty Jurisdiction in Australia / 39

This provides yet another reason for the revision of Navigation Act provisions, so far as this can be done within the present Terms of Reference.126

The Exercise of Admiralty Jurisdiction under the 1890 Act

57. Special Features of the Existing Jurisdiction. The special features of admiralty juris­ diction in the United Kingdom and comparable countries are discussed in some detail in chapter 6. But it is desirable to set out here certain special features of the jurisdiction ex­ ercisable under the 1890 Act.

58. Relation to Other Jurisdictions. The jurisdiction of Colonial Courts of Admiralty over the matters described above can give a misleading appearance of exclusivity. Col­ onial Courts of Admiralty do not have exclusive jurisdiction over such matters in all cir­ cumstances. Thus, a claim by a seaman for wages or by a master for wages or for dis­ bursements can be enforced, outside admiralty jurisdiction, under s 91(1) of the Naviga­ tion Act 1912 (Cth) or, to the extent that that section does not cover the field127, under

s 164 of the Merchant Shipping Act 1894 (UK) and other provisions in various State en­ actments.128 Similarly, a claim in the nature of salvage, depending on the size of the claim, on the value of the property salved or on the consent of the parties, may be en­ forced summarily in certain State courts under s 318 of the Navigation Act 1912 (Cth). The same applies to claims for the return of property found as wreck at sea.129 Indeed, apart from such specific statutory provisions, most claims in admiralty could be brought before a court of appropriate general jurisdiction. Exceptions relate to claims based on the ‘general maritime law’, such as certain maritime liens or statutory liens (where the

owner of the ship in question is not personally liable) or (perhaps) some salvage claims.130

59. The Relevance of ‘International Comity'. In the exercise of the jurisdiction con­ ferred by the Colonial Courts of Admiralty Act 1890 (UK), courts are directed to have the same regard as the High Court in England to ‘international law and the comity of nations’.131 Thus, although the claim would otherwise be within its jurisdiction a Colonial

Court of Admiralty cannot entertain a proceeding in rem against a ship of a foreign state unless the ship in question was being used at the relevant time for ordinary trading pur­ poses or the immunity is waived.132 In addition, it is the usual practice for Colonial Courts of Admiralty to decline to exercise their jurisdiction in rem in certain cases where foreign vessels are involved until the consular representative of the foreign state con­

cerned has been duly notified.133 The former rule is no more than an application of ordi-

126. On the complex relations between the M erchant Shipping Acts 1894 and 1906 (UK) and the Navigation Act 1912 (Cth), see also The WD Atlas (1967) 12 FLR 320 (Ct of Marine Inquiry); Bice v Cunningham [1961] SASR 207, 211-14; Cotter v Huddart Parker Ltd ( 1942) 42 SR (NSW) 33, 39-42 (Jordan CJ); Burns Philp & Co Ltd v Nelson & Robertson Ply Ltd (1958) 98 CLR 495, 501-3 (Taylor J). cf Victoria v Common­

wealth (1937) 58 CLR 618. 127. These provisions are discussed in para 163. 128. eg Seamen’s Act 1898 (NSW) s 3, 4, 57; Marine Act 1958 (Vic) s 3, 234, 262-3; Merchant Seaman Act 1935 (Tas) s 3 ,4 ; Marine Act 1948 (WA) s 4, 110, 8, 94, 143-4. 129. Navigation Act 1912 (Cth) s 304, 305. See para 51. 130. It seems that at common law, courts will not award salvage in the absence of contract: see Kennedy's Civil

Salvage. 4th edn, KC McGuffie ed, Stevens, London, 1958, 372-5. For maritime and statutory liens see para 15-7. For bottomry and respondentia see para 50. 131. s 2(2). See CA Ying, ‘Colonial and Federal Admiralty Jurisdiction' (1981) 12 FLR 234, 249. 132. Compania Naviera Vascongado v Steamship Cristina [1938] AC 485; Owners o f the Ship Philippine Admiral

v Wallem Shipping (Hong Kong) Ltd[\911] AC 373; / Congreso del Partido [ 1983] 1 AC 244. 133. cf The Evangelistria (1876) 2 PD 241; The Annette: The Dora [1919] P 105. But see The Jupiter (No 2) [1925] P 69. See also para 44 n 52.

40 / Civil Admiralty Jurisdiction

nary principles applicable by the High Court in its general jurisdiction134, but Courts of Admiralty have traditionally been aware of the international or transnational context of the jurisdiction they exercise, and have had regard to arguments drawn from the mari­ time jurisprudence of other countries and of attempts at international unification of the law made during this century. This tendency owes something to the civil law origins of English admiralty law and procedure, but is also a reflection of current needs for the international recognition of the arrest and judicial sale of ships and of the exercise of jur­ isdiction based upon such arrest. Although the courts no longer regard themselves as ap­ plying (without statutory authorisation) the ‘general law of the sea’135, notions of interna­ tional comity and of a general maritime law remain influential.136

Other Sources of Federal Maritime Jurisdiction in Australia

60. Changes in Australian Maritime Legislation. While Australian admiralty jurisdic­ tion has remained virtually unchanged since federation, the same has not been true in other areas of ‘maritime law’ — although even here there had been, until fairly recently, no thorough, comprehensive program of revision and reform, but rather a series of Acts on subjects of particular concern at the time. The Commonwealth Commission of In­ quiry into the Maritime Industry in 1976 commented that the Navigation Act 1912 (Cth), the principal federal legislation in this field, ‘in many respects ... still reflects British atti­ tudes at the end of the nineteenth century’, and called for comprehensive Australian leg­ islation replacing both the Merchant Shipping Act 1894 (UK) and the Navigation Act

1912 (Cth), and enacting ‘appropriate provisions specifically designed to meet the needs of the Australian maritime industry’.137 Since then there has been a great deal of legisla­ tive activity in respect of off-shore and maritime matters generally, including major amendments to the Navigation Act 1912 (Cth).138 However that Act has not been subject to any systematic revision. As the then Minister for Transport commented, in introducing the Bill which became the Navigation Amendment Act 1979 (Cth),

... this Bill does not purport to effect a general revision of the Navigation Act. The need for such a revision has been recognised for some time and it is the Government’s intention to undertake such a task following the completion of discussions currently under way with the States and industry.139

This Report is not directly concerned with the body of substantive maritime law applying in Australia. But a number of Acts impinge on issues of admiralty jurisdiction, as the Terms of Reference, by their reference to the need for ‘consequential amendments ... to any other Commonwealth legislation including the Navigation Act 1912’, recognise. Some brief reference to relevant Commonwealth Acts is therefore necessary.

134. And now codified for Australia in the Foreign States immunities Act 1985 (Cth) s 18, based on this Com­ mission’s Report No 24, Foreign Stale Immunity, AG PS, Canberra, 1984. 135. cf Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221, 232 (Lord Diplock). 136. cf id, 239-41 (Lord Diplock) 244, 247, 250 (Lords Salmon, Scarman, diss). 137. Commission of Inquiry into the Maritime Industry, Fourth Report. Australian Maritime Legislation.

AG PS, Canberra, 1977, 1-2 (Summers Report). 138. One important aspect of this program of renovation is the Shipping Registration Act 1981 (Cth), re­ placing Part 1 of the Merchant Shipping Act 1894 (UK): see para 65. Other recommendations of the Summers Report were implemented by the Navigation Amendment Act 1979, in particular the enactment

of new limitation of liability provisions in Part VIII of the Act (involving the repeal of Part VIII of the Merchant Shipping Act 1894 (UK)). 139. 114 Part Debs (H o f Reps) (22 May 1979) 2179-80. The point is made, even more forcefully, by Zelling (1984) 17 (the Act ‘desperately needs a proper codification for use in 1983’).

The Present Scope o f Admiralty Jurisdiction in Australia / 41

61. Seamen's Compensation Act 1911 (Cth). This Act provides for compensation to be payable to seamen (including masters and pilots) in respect of injury or death arising out of or in the course of employment on an Australian ship engaged in overseas, interstate or Territorial trade, and in certain other circumstances.140 The Act does not refer to ad­

miralty but does authorise the detention of a ship subject to certain conditions.141 This power of detention is considered in chapter 12.142 62. Navigation Act 1912 (Cth). In addition to provisions already referred to, this Act has provisions dealing with limitation of liability suits.143 Other provisions include s 383, which gives (in terms similar to s 13 of the Seamen’s Compensation Act 1911 (Cth)) pow­ er to Supreme Courts to detain foreign ships with respect to claims for injury negligently caused to property ‘belonging to the Queen, the Commonwealth, a State, a Territory, a Commonwealth country other than Australia, a British subject or a citizen of a Common­ wealth country’144, and s 399, which empowers a Court to order the sale of a ship or its equipment to meet unpaid liabilities of the master or owner. 63. Historic Shipwrecks Act 1976 (Cth). This Act protects certain notified ‘historic ship­ wrecks’ in proclaimed Australian waters. The general law of salvage is excluded with re­

spect to such shipwrecks. 64. Protection of the Sea (Civil Liability) Act 1981 (Cth). This Act was one of a number of Acts passed in 1981 to implement various international conventions on marine pollu­ tion and to provide for the protection of the Australian marine environment against such pollution.145 In particular the Protection of the Sea (Civil Liability) Act 1981 (Cth) con­ fers jurisdiction on State and Territory Supreme Courts to hear claims under provisions of the 1969 Convention on Civil Liability for Oil Pollution Damage, and its Protocol of

1976 • with respect to incidents causing pollution damage in Australia (s 9); and • seeking to limit a shipowner’s or insurer’s liability with respect to such claims (s 10).146 Under Article XI(1) and (3) of the Convention (given the force of law by s 8(1) of the Act) actions for compensation for pollution damage, or to recover the cost of preventive measures, may only be brought in the courts of the contracting State in whose territory or territorial sea the damage occurred, or in respect of impending damage to the territory or territorial sea of which the preventive measures were taken.14

65. Shipping Registration Act 1981 (Cth). This Act, which established for the first time an Australian Register of Ships (and of interests in ships including mortgages), has al­ ready been referred to.148 Jurisdiction is conferred on State and Territory Supreme Courts with respect to disputes concerning

• caveats on the Register (s 47B, 47C); • rectification of the Register (s 59); • enforcement of mortgages where a ship is to be deregistered (s 66);

140. See Seamen’s Compensation Act 1911 (Cth) s 4. 141. The owner need not have been made a defendant through service in personam before detention of the ship: cf s 13(3). 142. See para 265-6. 143. See para 176. 144. See para 275. 145. See 121 Part Debs (H o f Reps) (5 March 1981) 485-7 for the Minister for Transport's second reading

speeches on the ‘Protection o f the Sea’ legislation. 146. See also Part TV (recovery of expenses incurred by the Commonwealth under the Protection of the Sea (Powers of Intervention) Act 1981 s 21 (expenses charge on ship) and s 22 (detention of ships). See further para 175. 147. See para 175.

148. See para 39, 60.

42 / Civil Admiralty Jurisdiction

• proceedings for forfeiture (s 70). Appeals from decisions on such matters lie to the Federal Court, and thence to the High Court (s 82).

5. The Federal Constitution and Admiralty Jurisdiction

66. Substantive and Jurisdictional Powers. In reviewing the range of federal powers with respect to admiralty and maritime jurisdiction, it is necessary to take into account both the specific power to invest ‘Admiralty and maritime jurisdiction’ in federal and State courts, contained in s 76(iii) of the Constitution, and various substantive legislative

powers in s 51.

Federal Power to Confer ‘Admiralty and Maritime Jurisdiction’

67. The Scope of Section 76(iii). Section 76(iii) of the Constitution is the only section of the Constitution which refers specifically to jurisdiction in admiralty. It reads as follows: The Parliament may make laws conferring original jurisdiction on the High Court in any mat­ ter —

(iii) Of Admiralty and maritime jurisdiction. Section 77(iii) allows the Parliament to make laws investing any court of a State with fed­ eral jurisdiction over any matter arising, inter alia, under s 76(iii). Section 76(iii) has re­ ceived very little attention, judicial or otherwise, and what attention it has received has been inconclusive.1 In John Sharp & Sons Ltd v The Ship Katherine Mackall’, Justice

Isaacs observed that If it became necessary to determine this case upon s 76(iii) of the Constitution and s 30(b) of the Judiciary Act [which purported to confer original jurisdiction on the High Court ‘in mat­ ters of admiralty or maritime jurisdiction*] there are some very difficult questions to answer ...

Were the decision of this case dependant on the provision of s 76(iii) of the Constitution with the statutory exercise of the power, there would be a field of inquiry by no means clear.2 There are other more recent dicta to similar effect.3 These statements notwithstanding, guidance as to the meaning of s 76(iii) is available from several sources, including the in­ terpretation of the United States provision from which it was drawn and the application

of general principles of constitutional interpretation now well established in Australia. 68. 'Admiralty and Maritime Jurisdiction' in the United States Constitution. The words of s 76(iii) were copied directly from Art III, s 2(1) of the Constitution of the United States, which provides that

1. See generally GJ Lindell, ‘Admiralty and Maritime Jurisdiction: Necessity for Retaining Section 76(iii) of the Commonwealth Constitution'. This Paper was prepared at the request of the Judicature Committee of the Australian Constitutional Convention. For background to the request see Proceedings o f the Austral­ ian Constitutional Convention. Adelaide 1983. Government Printer, Melbourne, 1983, vol 2, 25. The Paper

is Appendix C in the same volume. The Australian Constitutional Convention at its 1983 session ap­ proved the Committee’s recommendations that s 76(iii) be retained: id. vol I, xxviii, and for the debate see id, 59-62. 2. (1924) 34 CLR 420, 428. 3. See Mcllwraith McEacharn Ltd v Shell Co o f Australia Ltd (1945) 70 CLR 175, 208 (Dixon J): China Ocean Shipping Co v South Australia (1979) 145 CLR 172, 228 (Stephen J).

44 / Civil Admiralty Jurisdiction

The Judicial Power [of the United States] shall extend ... to all cases of admiralty and maritime jurisdiction.

The reasons for conferring federal jurisdiction in admiralty and maritime cases in the United States have been said to be clear: Admiralty was a separate corpus of law which before the American War of Independence had been administered by British Vice-Admiralty Courts rather than by the ordinary colonial

courts, so that general Admiralty jurisdiction covered an area in which the State courts and their predecessors had little experience. Moreover, ‘since one of the objectives of the Philadel­ phia Convention was the promotion of commerce and the removal of obstacles occasioned by the diverse local rules of the States, it was only logical that it should contribute to the develop­ ment of a uniform body of maritime law by establishing a system of federal courts and grant­ ing to these tribunals jurisdiction over Admiralty and maritime cases’. The principal com­

merce of the period was maritime, and it was in this jurisdiction that disputes with foreigners were more likely to arise.4

As a source of jurisdiction Art III s 2(1) was thus intended to have a broad operation. In American colonial practice ‘admiralty’ jurisdiction had already been regarded as broader than the truncated jurisdiction of the English Court of Admiralty at that time: in particu­ lar the statutes of Richard II5 were regarded as inapplicable, so that local admiralty juris­ diction was not restricted to the ‘high seas’.6 It has been said that the term ‘maritime’ was added during the Convention Debates to make it clear that it was not to be restricted to the limited English jurisdiction.7 What is certain is that this expansive effect was, after ini­ tial divisions of opinion, well established in United States case law by the mid-nineteenth century. In the words of Justice Story in the landmark case of De Lovio v Bait, the juris­ diction

comprehends all maritime contracts, torts, and injuries. The latter branch is necessarily bound­ ed by locality; the former extends over all contracts (wheresoever they may be made or ex­ ecuted, or whatsoever may be the form of the stipulations) which relate to the navigation, busi­ ness or commerce of the sea ...8 That case held that a dispute as to marine insurance was within the jurisdiction, a result only recently achieved by statute in some Commonwealth countries.9 In addition it came to be settled that the waters covered by the jurisdiction extended

to all waters, salt or fresh, with or without tides, natural or artificial, which are in fact navi­ gable in interstate or foreign water commerce, whether or not the particular body of water is wholly within a State, and whether or not the occurrence or transaction that is the subject- matter of the suit is confined to one State.10

69. Relevance of the United States Position. In several respects the effect of the United States provision was different from its Australian counterpart. For one thing, federal jur­ isdiction in the United States was to be vested exclusively in federal courts (below the level of the Supreme Court). There was no equivalent power to s 77(iii) of the Common­ wealth Constitution to vest federal jurisdiction in State courts. Article III s 2(1) was thus taken as an assertion of an overriding ‘federal interest in the orderly and uniform judicial

4. Z Cowen & L Zines, Federal Jurisdiction in Australia. 2nd edn, Oxford University Press, Melbourne, 1978, 64, citing The Constitution o f the United States o f America: Analysis and Interpretation, ed Small and Jayson, 1964, 646. 5. See para 9.

6. G Gilmore & CL Black, The Law o f Admiralty. 2nd edn, Foundation Press, Mineola, 1975, 31-3. 7. CL Black, ‘Admiralty Jurisdiction: Critique and Suggestions’ (1950) 50 Col LR 259, 262 citing De Lovio v Boit 2 Gall 398; 7 Fed Cas 418 (1815) (Story J). For divergent accounts see H Putnam, How the Federal Courts were given Admiralty Jurisdiction’ (1925) 10 Cornell LQ 460; DW Robertson, Admiralty and Fed­

eralism. Foundation Press, Mineola, 1970, 6-17. 8. 7 Fed Cas 418, 444 (1815). 9. See para 173. 10. Gilmore & Black (1975) 32.

The Federal Constitution and Admiralty Jurisdiction / 45

governance of the concerns of the maritime industry’11, and this had certain implications for State law affecting maritime matters. In Australia no such exclusive jurisdiction was intended: it was sufficient that federal law (including federal jurisdiction) when validly enacted or conferred prevailed over State law and jurisdiction. At least since the Statute of Westminster Adoption Act 1942 (Cth), federal law has also prevailed over law and jur­ isdiction with an Imperial origin. A second difference was that it was settled by 1874 that the power over admiralty and maritime jurisdiction under the United States Constitution

carried with it Congressional power over the substantive law to be applied in that juris­ diction, that is, over the substantive maritime law.12 No such inference has been drawn in Australia: the High Court has so far acted on the basis that powers to confer jurisdiction under ss 75 and 76 of the Constitution do not confer any distinct, substantive legislative power over the subject matter of that jurisdiction13, although there is express power to legislate on matters incidental to the investment of jurisdiction.14 But both of these differ­

ences are a result of special rules of United States constitutional law, rules which are of general application and which do not relate to the interpretation of the words ‘of admir­ alty and maritime jurisdiction’ themselves. Neither of these differences is a reason for re­ jecting guidance to be obtained from United States jurisprudence on the meaning of the

jurisdictional grant itself. In the words of Justice HE Zelling:

There is no doubt that the expression ‘of Admiralty and maritime jurisdiction’ was expressly taken by our Founding Fathers from the corresponding expression in the Constitution of the United States. It is therefore reasonable to think that the words should be given a wide conno­ tation similar to that in America in their use in s 76(iii) of our Constitution. ... The High Court

should interpret the needs of Australia as a great maritime and trading nation with twelve thousand miles of sea coast and an interlocking and growing web of international connec­ tions, treaties and conventions.15

70. Settled Principles o f Australian Constitutional Interpetation. This conclusion is strongly reinforced by the application of well-established principles of constitutional in­ terpretation in Australia. Terms used in the Constitution are not to be construed narrow­ ly or pedantically, but liberally, in the light of changing circumstances and in view of

their role as constitutional, not merely statutory, terms. This is particularly true of em­ powering provisions, which are not to be interpreted on the assumption that certain mat­ ters (such as intrastate trade) are ‘reserved’ to the States or are outside the scope of Com­ monwealth power.16 These now well-established principles support the view that s 76(iii)

should not be interpreted narrowly but should be regarded as a broad power to confer jurisdiction of an admiralty or maritime character. The Commission concludes that

• The term ‘Admiralty’ in s 76(iii) is not restricted to the scope of ‘Admiralty’ juris­ diction under the Colonial Courts of Admiralty Act 1890 (UK), but would be in­ terpreted to include many if not all of the twentieth century extensions to that jur­ isdiction in comparable countries, so far at least as these relate to disputes involv­

ing ocean-going ships.

11. Black (1950) 262. 12. The Lottawanna 88 US 558 (1874); Panama Railroad Co v Johnson 264 US 375 (1924); Gilmore & Black (1975) 47; Note, ‘From Judicial Grant to Legislative Power: The Admiralty Clause in the Nineteenth Century’ (1954) 67 Harv LR 1214.

13. Owners o f the SS Kalihia v Wilson (1910) 11 CLR 689. 14. Constitution s 51(39); see para 73. 15. HE Zelling, ‘Constitutional Problems of Admiralty Jurisdiction’ (1984) 58 A LJ 8, 11. 16. See L Zines, The High Court and the Constitution. Sydney, Butterworths, 1981, 13-14. See Commonwealth

v Tasmania (1983) 46 ALR 625 for a strong example of the application of these principles — but there are many other examples; eg R v Coldham, ex parte Australian Social Welfare Union (1983) 47 ALR 225.

46 / Civil Admiralty Jurisdiction

• The term ‘maritime’ is not to be treated as a mere reaffirmation of the meaning of ‘Admiralty’ jurisdiction (otherwise it would be meaningless17); nor, in view of its history, can it be treated as somehow restricting the meaning of ‘Admiralty’. It is a term of extension, and includes all matters properly described as ‘maritime’, whether or not within English or Australian admiralty jurisdiction in 1900. • In particular, a matter may be one of ‘Admiralty and maritime jurisdiction’ not­

withstanding that it involves ships engaged only in intrastate trade, or that it arose in waters inter fauces terrae (and therefore within a State). These conclusions gain indirect support from the existence in s 51 and 98 of the Constitu­ tion of significant powers to legislate on maritime matters.18 In the light of those powers as interpreted by the High Court, it is hard to see what justification there could be for a limited construction of s 76(iii), leaving particular ‘maritime’ matters to State jurisdiction. This broad view is supported by such authority as there is. For example, Quick and Garran in 1901 were clear that the limitations imposed by [the 1890] Act on the jurisdiction of ‘Colonial Courts of Admiralty’ within the meaning of that A ct... cannot be read into the plenary powers conferred by that section.19

Justice Isaacs, despite the perceived obscurity of s 76(iii), commented that the Constitution (by section 51 (i) and (xxix) and section 98) undoubtedly gives great scope for relevant legislation. It is not, therefore, to be supposed that the constitutional power to confer jurisdiction on this Court in matters of admiralty and maritime law is a power in respect of

merely a stereotyped common law admiralty jurisdiction, which at the date of the Constitution had already been extended for more than forty years in England.20 In Mcllwraith McEacharn Ltd v Shell Co of Australia Ltd, Justice Dixon cited this pas­ sage, commenting that The jurisdiction of the Court under the Colonial Courts of Admiralty Act may not be co­ extensive with the jurisdiction that s 76(iii) of the Constitution empowers the Commonwealth Parliament to confer upon this Court ... The observations made by Isaacs J ... indicate on the one hand the objections that exist to following American doctrine and treating the words as covering a wide field of maritime causes, and on the other hand the grounds that may be urged for not confining them to the narrow jurisdiction conceded by the common law courts to ad­ miralty.21 Justice Gibbs in China Ocean Shipping Co v South Australia expressed himself much more strongly on this point: there seems to me no possible justification for construing the admiralty jurisdiction mentioned in s. 76(iii) to that which existed in England in 1900 ,..22 Despite the absence of decisions on the scope of s 76(iii) it is probable, if not certain, that the High Court will take a broad view of the power. This does not necessarily mean that all matters which now fall within admiralty jurisdiction in other comparable countries would be held to fall within s 76(iii) in Australia — though that result is quite likely.23 Par-17. All matters of Admiralty jurisdiction under the 1890 Act could be described as ‘maritime’ in the ordinary sense. 18. See para 75-6. 19. J Quick & RR Garran, The Annotated Constitution o f the Australian Commonwealth, Sydney, 1901, 800. It is true that they went on to describe it as ‘probably ... inexpedient ... to go outside the limits defined by [the 1890] Act, which may be taken as a guide to the reasonable limits of the jurisdiction". But this was an explicitly prudential argument, the force of which is long spent. See also FL Stow, ‘Maritime Law and Jurisdiction in Australia’ (1904) 2 Cth Law Rev 157, 161-3. 20. John Sharp & Sons Ltd v The Ship Katherine MackaW (1924) 34 CLR 420, 428. 21. (1945) 70 CLR 175, 208. 22. (1979) 145 CLR 172, 204. And cfCowen & Zines (1978) 69. 23. cf Zelling (1984) 22.

The Federal Constitution and Admiralty Jurisdiction / 47

ticular proposals for jurisdiction (for example over matters such as marine insurance) will be considered later in this Report.

71. Power to Confer Original and Appellate Jurisdiction. Where the Commonwealth Parliament has power to confer jurisdiction, it has substantial authority with respect to the courts which should exercise that jurisdiction and to the avenues of appeal. In par­ ticular, it may vest jurisdiction in existing State courts24, in existing or specially created federal courts25 or in Territory courts.26 Certain limitations apply depending on which

choice is made. The Commonwealth cannot alter the ‘structure’ or ‘constitution’ of a State court invested with federal jurisdiction27, although it has extensive power over the scope of jurisdiction (which need not be limited, either in terms of subject matter or geo­

graphical extent, to the jurisdiction otherwise exercisable by the court). In the case of fed­ eral courts the Commonwealth is, subject to Chapter III of the Constitution28, fully com­ petent to regulate the structure of the court. In the case of Territory courts the restrictions imposed by Chapter III do not apply29, but (as a corollary) it appears that a Territory court can only be given jurisdiction by a law under s 122 of the Constitution: it cannot be given federal jurisdiction.30 (On the other hand a federal court can be given jurisdiction by a law under s 122.31) Thus the Commonwealth could invest exclusive jurisdiction un­

der s 76(iii) in State Courts, or in the Federal Court (or an Australian Admiralty Court specially created), or could invest jurisdiction in federal, State and Territory Courts con­ currently (with provision for transfer or remittal of cases between them). It could provide

for appeals from all such courts in admiralty matters to go to the Federal Court exclu­ sively, or to the State Full Courts or Courts of Appeal (in the case of appeals from State Courts at first instance).32 It could provide for an appeal to the High Court as of right or by special leave only, and in some or all cases.33

72. Specific Constitutional Limitations. The Commonwealth’s power to allocate admir­ alty jurisdiction between the various courts is accordingly a broad one. However three potential difficulties need to be referred to:

• Questions o f Accrued and Associated Jurisdiction. Potentially the most important constitutional difficulty involves the problem of ‘accrued’, ‘pendent’ or ‘ancillary’ jurisdiction in cases with non-federal elements. It is possible for the same case to raise issues of ‘admiralty and maritime jurisdiction' and other issues of a non-

federal kind34, and in the case of jurisdiction vested in federal courts this may mean that no single court has jurisdiction to hear the whole case. But a federal court has jurisdiction to determine the entire case where it constitutes a single ‘matter’, and the High Court has adopted a very broad definition of when this is so.35 The extent to which difficulties of ‘accrued’ jurisdiction are likely to occur un-24. Constitution, s 77(iii). 25. Constitution, s 76 (High Court); 77(i) (other federal courts). 26. Constitution, s 122. 27. Le Mesurier v Connor (1929) 42 CLR 481; Russell v Russell (1976) 9 ALR 103; Cowen & Zines (1978)

196-9.

28. Especially s 71 (only Ch III courts can exercise federal judicial power); 72 (judges' appointment, tenure and remuneration); 73 (position of High Court as ultimate Australian court of appeal), 80 (trial by jury in certain cases).

29. R v Bernasconi (1915) 19 CLR 629; Porter v R (1926) 37 CLR 432; Sprat! r Hermes (1965) 114 CLR 226. 30. Capital TV & Appliances Pty Ltd v Falconer (1971) 125 CLR 591. See J Crawford, Australian Courts o f Law. Oxford University Press, Melbourne, 1982, 38-42. 3 1. Spratt v Hermes (1965) 114 CLR 226. 32. Constitution, s 77.

33. s 73. 34. See generally Cowen & Zines (1978) 72-5; Crawford (1982) 132-7. 35. Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 33 ALR 465; Fencott v Muller (1983) 46 ALR 41; Stack v Coast Securities (No 9) Pty Ltd (1983) 49 ALR 193.

48 / Civil Admiralty Jurisdiction

der new admiralty legislation in Australia will depend to a considerable degree on the precise scope of that jurisdiction: this issue, and its impact on the choice of courts to exercise admiralty jurisdiction in Australia, are examined in chapter 11.

• Ancillary Judicial Power of Masters and Registrars. It is common for English and Australian courts to delegate ancillary powers to court officials (for example taxing costs and quantifying damages) and this has especially been the case in admiralty. The High Court had earlier held that such officials, not constituting part of the State court itself, could not exercise federal jurisdiction36, but these earlier deci­ sions have now been overruled.37 Whether officials of federal courts can validly ex­ ercise similar powers is not as clearly settled, but it is probable that they can do so. These questions are discussed in chapter 14 in the context of the appropriate pow­

ers of Admiralty Registrars and Marshals.38

• Exercise of Australia-wide Jurisdiction. Although the Commonwealth could consti­ tutionally give Australia-wide jurisdiction to federal and State courts, Territory courts can, it appears, be given jurisdiction only with respect to matters having some connection with the Territory. This is a corollary of the rule that Territory courts may not exercise federal jurisdiction: an Australia-wide admiralty jurisdic­ tion vested in a Territory court with respect to matters arising outside the Territory

would be a federal, not a Territory, jurisdiction. The implications of this restriction for the allocation of admiralty jurisdiction are discussed in chapter 11.

73. Incidental Matters (including Procedure). In addition, the Commonwealth Parlia­ ment has extensive power to make laws incidental to the vesting of jurisdiction in State or federal courts. This derives from s 51(39) which gives power to legislate on ‘matters in­ cidental to the execution of any power vested ... in the Parliament... or in the Federal Ju­ dicature’. Pursuant to this power (or the implied incidental power) ‘Parliament may in the exercise of any of [its] substantive powers ... make all laws which are directed to the end of those powers and which are reasonably incidental to their complete fulfilment’.39 In the context of uniform legislation on admiralty jurisdiction, this would include provisions such as for admiralty rules, for remittal and transfer of cases, for particular procedures, for special powers for the arrest, detention and sale of ships and for other remedies.40

Exactly where the line is to be drawn between incidental matters and matters beyond Commonwealth power can be a difficult question (especially in the case of admiralty jur­ isdiction where matters of jurisdiction, procedure and substance have always been closely intertwined). It will be discussed in more detail after the Commonwealth’s substantive legislative powers in this area have been outlined.41

36. Kolsis v Kolsis (1970) 122 CLR 69; Knight v Knight (1971) 122 CLR 114. 37. Commonwealth v Hospital Contribution Fund o f Australia (1982) 40 ALR 673. 38. See para 287. 39. Burton v Honan (1952) 86 CLR 169, 178 (Dixon J). 40. It would also be a valid procedural matter to provide for assessors to advise the judge, eg in collision

cases, although they could not be given decisional power. Whether provision for assessors is in fact de­ sirable is discussed in ch 14. 41. See para 80.

The Federal Constitution and Admiralty Jurisdiction / 49

Substantive Federal Legislative Power over Admiralty and Maritime Matters

74. A Range o f Powers. In addition to the specific power in s 76(iii) to invest ‘admiralty and maritime jurisdiction’ in Australian courts, the Commonwealth Parliament has a range of substantive legislative powers over admiralty and maritime matters.42 75. Interstate and Overseas Trade and Commerce. Section 51(1) of the Constitution confers on the Commonwealth Parliament power to legislate with respect to ‘trade and commerce with other countries, and among the States’. Section 98 provides that:

The power of the Parliament to make laws with respect to trade and commerce extends to navigation and shipping ...

Although it was early held that s 98 was merely declaratory of the effect of s 51(1), and did not give additional power to legislate with respect to intrastate shipping and naviga­ tion43, the power over interstate and overseas trade, navigation and shipping is an exten­ sive one. It extends, for example, to acts preparatory to or part of an interstate or over­ seas transaction and to the regulation of documentation for or disputes arising out of such transactions.44 In the words of the High Court in 1920

All the commercial arrangements of which transportation is the direct and necessary result form part of ‘trade and commerce’. The mutual communings, the negotiations, verbal and by correspondence, the bargain, the transport and the delivery are all, but not exclusively, parts of ‘trade and commerce’...45

In addition the Commonwealth can regulate the safety and efficiency of interstate or international navigation, even if this also requires concomitant regulation of intrastate navigation. It could probably, therefore, lay down a general code of navigation rules in navigable waters around Australia applicable to all ships.46 Thus ‘the combination of s 51 (i) with s 98 gives the widest power to deal with the whole subject matter of naviga­ tion and shipping in relation to trade and commerce with other countries and among the

States’.47 As was said in Australian Steamships Ltd v Malcolm, s 98 authorizes Parliament to make laws with respect to shipping and the conduct and management of ships as instrumentalities of trade and commerce, and to regulate the relations and recipro­ cal rights and obligations of those conducting the navigation of ships in the course of such commerce both among themselves and in relation to their employers on whose behalf the navigation is conducted.48

The Navigation Act 1912 (Cth) is largely founded on the combination of s 51(1) with s 98. 76. Application to Admiralty Jurisdiction. All or virtually all matters of ‘admiralty and maritime jurisdiction’ within the meaning of s 76(iii) relate to navigation and shipping, and most occur in the course of trade and commerce or incidentally thereto. Section 51(1) is not, however, restricted to subjects of ‘admiralty’ jurisdiction in any narrower

42. In Canada where there is no equivalent to s 76(iii), the federal power over 'navigation and shipping" (Constitution Act 1867, s 91(10)) has been held to justify the enactment of legislation conferring adm iralty jurisdiction in broad terms, eg over marine insurance: Zavarovalna Skupnosi Triglav v Terrasses Jewellers /nc [1983] 1 SCR 283. But see Lindell (1983) 14, commenting that too much reliance should not be placed

on the Canadian cases in view of the constitutional differences between Canadian and Australian adm ir­ alty jurisdiction. 43. Owners o f the SS Kalibia v Wilson (1910) 11 CLR 689. 44. See eg Zines (1981) 42-58; PH Lane, The Australian Federal System. 2nd edn. Law Book Co, Sydney,

1977, 55-92. 45. W & A Macarthur Ltd v Queensland (1920) 28 CLR 530, 547. 46. See Airlines o f New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54. The decision in R v Turner, ex parte Marine Board o f Hobart (1927) 39 CLR 411 would probably now be overruled or con­

fined to its special facts: see PD Phillips, The Trade and Commerce Power' in R Else-Mitchell (ed) Es­ says on the Australian Constitution. 2nd edn, Law Book Co, Sydney, 1961, 129, 153-5. 47. Australian Coastal Shipping Commission v O Reilly (1962) 107 CLR 46, 54 (Dixon CJ). 48. (1914) 19 CLR 298, 335.

50 / Civil Admiralty Jurisdiction

sense: under s 76(ii) of the Constitution, the Parliament can confer federal jurisdiction in any matter of navigation and shipping arising in the course of interstate or overseas trade and commerce, whether or not arising at sea.

77. External Affairs. The external affairs power (s 51(29)), as interpreted by the High Court in a series of cases in the last twenty years, is now a major potential source of legis­ lative power over matters of admiralty and maritime jurisdiction. It is possible to dis­ tinguish three different ways in which the external affairs power may be relevant.

• Treaties as External Affairs. The effect of the two main High Court decisions on the external affairs power — Koowarta v Bjelke-Petersen49 and Commonwealth v Tas­ mania 50 — is that the Commonwealth Parliament has legislative power to imple­ ment in Australia the provisions of any international treaty to which Australia is a party and which is in force, provided only that the treaty was not entered into sole­ ly as a device to acquire legislative power, and that the legislation in question is reasonably adapted to implementing the treaty in question, and is not inconsistent with it. It is unnecessary for present purposes to discuss these requirements in more detail. The Commonwealth could, by acceding to a treaty such as the 1952 Brussels Arrest Convention, legislate to implement that Convention as a matter of Australian law. Whether this is desirable is, of course, another question, depending on how closely it is desirable to adhere to the terms of that Convention in framing new Australian legislation.4 9 5 0 51

• Matters of International Concern Independently of Treaties. In addition, s 51(29) authorises federal legislation on matters intrinsically of international concern or significance, independently of any treaty.52 5 3 The question of jurisdiction over for­ eign ships or in respect of maritime disputes involving those ships may well be such a matter, although in view of the plenary character of s 51(1) and 51(20) it may not be necessary to rely on this aspect of s 51(29).

• Matters Geographically External to Australia. In New South Wales v Common­ wealth 53 (the Seas and Submerged Lands Act Case) the High Court held that the territory of the States did not include the ‘high seas’, in the sense of that term ex­ plained earlier54, but stopped at low-water mark, or at the line closing a bay or gulf the waters of which are inter fauces terrae at common law. The Coastal Waters (State Title) Act 1980 vested in the States ‘the same right and title to the property in the sea-bed beneath the coastal waters of the State ... as would belong to the State if that sea-bed were the sea-bed beneath waters of the sea within the limits of the State’.55 However the Act did not purport to extend the limits of any State (s 8(a)). Similarly the Coastal Waters (State Powers) Act 1980 empowers States to

legislate for their coastal waters as if those waters were ‘within the limits of the State’ (s 5(a)). But this is stated not to extend the limits of any State (s 7(a)), or to give any force or effect to a provision of a law of a State to the extent of any inconsistency with a law of the Commonwealth or with the Constitution of the Commonwealth of Aus­

tralia or the Commonwealth of Australia Constitution Act (s 7(c)).

49. (1982) 39 ALR 417. 50. (1983) 46 ALR 625. 51. See para 94. 52. See eg Commonwealth v Tasmania (1983) 46 ALR 625, 693-5 (Mason J); 728-30 (Murphy J); 772-4

(Brennan J): 805-6 (Deane J). 53. (1975) 135 CLR 337. 54. See para 37. 55. Coastal Waters (State Title) Act 1980 (Cth) s 4(1). The term ‘coastal waters’ is defined in s 3(1) to mean

the 3-mile territorial sea.

The Federal Constitution and Admiralty Jurisdiction / 51

Thus the Acts do not purport to affect Commonwealth legislative power over ‘coastal" or other waters external to Australia. In New South Wales v Commonwealth, a ma­ jority of the Court held that the Commonwealth had, under s 51(29), plenary legisla­ tive power over matters geographically external to Australia. In Justice Jacobs’

words, the Commonwealth has the power to make laws in respect of any person or place outside and any matter or thing done or to be done or prohibited to be done outside the boundaries of the Commonwealth.56 On this view the Commonwealth could, if necessary incorporating by reference the

law applicable to events or transactions on the ‘high seas’57 or in other countries, con­ fer jurisdiction under s 76(ii) with respect to all such matters or events, whether or not they also constitute matters of ‘admiralty and maritime jurisdiction’ in some narrower

sense.

78. Trading, Financial and Foreign Corporations. Section 51(20) of the Constitution en­ ables the Commonwealth to make laws with respect to Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.

Although the outer limits of the corporations power are not yet fixed, a number of things are clear. Section 51(20) is not limited, as is s 51(1), to interstate or overseas trade.58 It ex­ tends to regulating at least the trading and financial activities of trading and financial corporations, and activities incidental thereto.59 6 0 The view adopted by at least three judges

of the High Court in Commonwealth v Tasmania60 is that the power extends to allow regulation of the external affairs of the relevant corporations generally.61 Except in the case of small pleasure boats and yachts not operated for hire, most sea-going vessels which would be the subject of admiralty proceedings in Australian courts are owned or operated by foreign, trading or financial corporations within the meaning of s 51(20).62 Companies which own or operate ships and which are incorporated in Australia would

normally, if not invariably, be trading or financial corporations within the meaning of s 51(20) either because of their current activities or because they were formed for trading or financial purposes.

79. Other Relevant Powers. Other relevant federal powers might include:

• Defence. Section 51(6), which refers to ‘the naval and military defence of the Com­ monwealth ...’, would authorise the enactment of federal legislation on prize, and the conferral of jurisdiction over prize under that legislation.63 • Insurance, other than local State insurance. To the extent that there is doubt as to

whether disputes as to marine insurance are matters of ‘admiralty and maritime jurisdiction’64, the power to legislate for ‘insurance, other than State insurance, also State insurance extending beyond the limits of the State concerned’ provides a po-56. (1975) 135 CLR 337,497. 57. See para 80. 58. Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468.

59. ibid; R v Australian Industrial Court, ex parte CLM Holdings Ply Ltd (1977) 136 CLR 235. 60. (1983) 46 ALR 625, 710-13 (Mason J); 736 (Murphy J); 813-16 (Deane J). Gibbs CJ (dissenting) dis­ agreed (id, 684), as (probably) would have Wilson J (id, 756) and Dawson J (id, 853). Brennan J did not decide the point: id, 789-90.

61. Disputes between ship-owning corporations and their employees or agents would, at least as far as they related to the general activities of the corporation, be within the power: R v Australian Industrial Court, ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235. 62. Some local commercial fishing craft are also not owned or operated by corporations. 63. These questions will be dealt with in a separate Report.

64. cf para 68.

52 / Civil Admiralty Jurisdiction

tential source of power (s 51 (14)). The Marine Insurance Act 1909 (Cth) relies on this power. Section 4 provides that:

The rules of the common law, including the law merchant, save in so far as they are in­ consistent with the express provisions of this Act, shall apply to contracts of marine in­ surance.

Jurisdiction over contracts of marine insurance could, therefore, be included in ad­ miralty jurisdiction pursuant to s 76(ii), and independently of s 76(iii). This would exclude State marine insurance not extending beyond the limits of the State65, but there must be few such contracts of marine insurance not so extending.

• Bankruptcy and insolvency. Proceedings for the arrest and sale of a ship in admir­ alty are a form of maritime bankruptcy. Where claims against a ship cannot be met, the regulation of priorities among competing claims would be a matter with respect to insolvency (s 51(17)).66 It would therefore be within federal power to en­ act a provision, such as s 11 of the Admiralty Jurisdiction Regulation Act 1983 (SAf), providing a comprehensive ranking of claims in admiralty jurisdiction.67

• Federal Territories. Section 122 gives the Commonwealth plenary power to make laws with respect to the various territories of the Commonwealth, including laws conferring jurisdiction on Territory or federal courts with respect to matters arising in the Territory or under laws made with respect to the Territory.

The Relation between Legislative Power and Jurisdiction

80. The Basic Principle. Section 76(ii) of the Constitution, in conjunction with s 77(i) and (iii), gives power to the Commonwealth Parliament to confer on federal or State courts jurisdiction in any matter ‘arising under any laws made by the Parliament’. Where, as with the Shipping Registration Act 1981 (Cth), the Marine Insurance Act 1909 (Cth) or the other federal maritime legislation referred to in para 60-5, a ‘law made by the Parlia­ ment’ is in existence, there is no difficulty in conferring jurisdiction over matters arising under that law on any court with admiralty jurisdiction, and providing that the s 76(ii) jurisdiction is to be exercised in the same way as jurisdiction under s 76(iii). In this way

any limitations there may be on the meaning of ‘admiralty and maritime jurisdiction’ in s 76(iii) could be circumvented. The problem is greater, however, where no substantive federal law has been enacted (notwithstanding the power to do so). Is a ‘bare’ grant of jurisdiction sufficient under s 76(ii) to create a ‘matter arising under’ a law made by the

Parliament? In the United States this question is answered in the affirmative, on the basis that the conferral of federal jurisdiction is without more a method of regulating the sub­ ject matter and is accordingly within Congressional power.68 This theory of ‘protective jurisdiction’ has never been relied on by Australian courts, and its validity under the

Commonwealth Constitution is doubtful.69 But the High Court has been very ready to imply from apparently jurisdictional provisions some substantive rule (which might only

65. cf Marine Insurance Act 1909 (Cth) s 6(1). For the meaning o f ‘limits of the State' see para 77. 66. On the scope of s 51(17) see ALRC 6, Insolvency: The Regular Payment o f Debts. AG PS, Canberra, 1977, 74-9. 67. See further para 256-62. This might in any event be valid as incidental to the investment of admiralty ju r­

isdiction: see para 73. 68. See Cowen & Zines (1978) 124-5 for a brief account. 69. id, 128.

The Federal Constitution and Admiralty Jurisdiction / 53

be a choice of law rule) to which the conferral of jurisdiction could be attached and which would give rise to a matter under s 76(ii).70 Cowen and Zines comment that It may be that in substance there will be little difference in the two approaches [viz ‘protective jurisdiction’ or the implication of a substantive rule] depending on how far the High Court is

prepared to go in implying rules of substantive law. There would be no practical difference if the rule that is implied is an ambulatory provision incorporating State statutory or common law ... It would, however, obviously be wise for the draftsmen to provide expressly for the ap­

plication of the common law or statutory law of a particular State. If that is done, it would ap­ pear that an object similar to that of ‘protective jurisdiction’ can be achieved. It is for this pur­ pose, of course, necessary that the matter in respect of which jurisdiction is granted is one that can be controlled under Commonwealth law.71

This technique could be used to ensure that any possible gaps in s 76(iii) were filled. As was concluded in para 70, s 76(iii) is, so far as subject matter is concerned, probably broad enough for the support of s 51 powers not to be needed. Two areas where such powers may be needed, however, are maritime liens and statutory rights of action in rem which have the effect of binding shipowners with respect to liabilities of other persons op­ erating or dealing with the ship (for example various kinds of charterers). It can be ar­ gued that maritime liens are substantive rights, so that any legislative provision which

goes beyond providing a jurisdiction to enforce maritime liens (or related procedural matters such as time limits) goes beyond the scope of a jurisdictional power such as s 76(iii), and needs the support of a substantive legislative power. It could also be argued that the creation of a statutory right of action in rem with respect to a ship in respect of the liability of someone other than the shipowner has a ‘substantive’ aspect. If the rel­ evant person liable in personam on the claim does not satisfy the liability, the ship may be sold, and to this extent the owner, though not personally liable, is directly affected. So far as maritime liens are concerned, the argument has some force, although the classification of maritime liens as ‘substantive’ or ‘procedural’ is not settled72, and many of the aspects of maritime liens which need clarification are undoubtedly procedural in character.73

Moreover, maritime liens were central in 1900 to the idea of admiralty jurisdiction and remain an important part of it: a power to define and regulate admiralty jurisdiction could easily be held to extend to all aspects of maritime liens.74 Whatever the position with respect to maritime liens, the position with respect to statutory rights of action in

rem seems clear. There was no fixed rule in 1900 that ships could only be arrested on a statutory right in respect of owners’ liabilities.75 In many situations the service or arrest of a ship on a statutory right has important effects on other persons interested in the ship; this is especially so where the ship is sold. Yet it is clear that these situations, which have

always been a feature of statutory rights of action in rem, fall within the scope of s 76(iii).

70. id, 125-8, citing R v Commonwealth Court o f Conciliation and Arbitration, ex parte Barrett (1945) 70 CLR 141; Hooper v Hooper (1955) 91 CLR 529; Suehle v Commonwealth (1967) 116 CLR 353; Carter Bros v Renouf (1962) 111 CLR 140 (where the argument failed, but only as to an aspect of the case which was held to be beyond federal power altogether). 71. id, 128-9.

72. See para 14-17. 73. eg time limits for bringing such claims (presently covered by the doctrine of laches): see para 249-55. Al­ though it has been argued that the doctine of laches, so far as it affects maritime liens, is substantive and not procedural (Australian Mining Industry Council, Submission 86, 13 May 1986, 4) this is very doubt­

ful. The doctrine of laches (like other time bars) needs to be specifically relied on and can be waived. Functionally laches operates as a discretionary time bar: there is no reason to treat laches as somehow immune from the constitutional power in s 76(iii) and 51(39) to regulate admiralty jurisdiction and mat­ ters incidental thereto. See further Jackson (1985) 96-7; Thomas (1980) 281-3 (‘Where there exists a statu­ tory time limitation, there can be no successful challenge for delay within the specified period’). One un­ settled aspect, which may or may not be ‘substantive’ but which is undoubtedly within federal power un­ der s 51(29), is the extent to which foreign maritime liens will be enforced: see para 123. 74. As in the United States: see para 68. 75. See para 127 for discussion of the 19th century position.

54 / Civil Admiralty Jurisdiction

The extent to which it is necessary to rely on substantive legislative powers with respect to maritime liens or statutory rights of action in rem will of course depend on the precise proposals. These questions will accordingly be dealt with in chapter 8, where proposals for reform in this area are made. As a general matter it can be concluded that there is power under s 76(iii) to create statutory rights of action in rem on a basis other than the in personam liability of the owner of the ship in question, and that at least some aspects of

maritime liens (including jurisdictional, procedural and incidental aspects) can be dealt with, although whether new maritime liens may be created is an open question.

81. Federal Power to Repeal Imperial Admiralty Legislation Applying to Australia. Sec­ tion 2(2) of the Statute of Westminster 1931 (UK) provides that No law and no provision of any law made after the commencement of this Act by the Parlia­ ment of a Dominion shall be void or inoperative on the ground that it is repugnant to the law

of England or to the provisions of any existing or future Act of Parliament of the United Kingdom, or to any order, rule or regulation made under any such Act, and the powers of the Parliament of a Dominion shall include the power to repeal or amend any such Act, order,

rule or regulation in so far as the same is part of the law of the Dominion.

As a result of the Statute of Westminster Adoption Act 1942 (Cth), the Parliament of the Commonwealth has power to repeal United Kingdom Acts so far as they are part of Aus­ tralian law. It is now clear that this is an independent power of repeal which is not limit­ ed to repeal of laws which the Commonwealth Parliament has power itself to enact under s 51 of the Constitution.76 7 7 In Kirmani v Captain Cook Cruises Pty L td 11, the High Court held that the limitation of liability provisions of the Merchant Shipping Act 1894 (UK) had been wholly repealed by the Navigation Amendment Act 1979 (Cth) s 104, although the 1979 Act did not deal with limitation of liability involving ships which were not ‘sea­ going’ ships. While different members of the majority reached this conclusion for slightly different reasons, it follows from the decision that the Commonwealth’s power of repeal extends to the repeal of Imperial legislation such as the Colonial Courts of Admiralty Act

1890 (UK). It is possible that the decision of one member of the majority (Justice Brennan) would have been different if the States had had the power themselves to repeal the legislation in question, and that the decision may therefore not be applicable now that the Australia Act 1986 (Cth), and its United Kingdom counterpart, have been enacted

and have come into force.78 However, even on the narrower view of Commonwealth power (taken by the minority in Kirmani's case), the Commonwealth has ample power to repeal the Colonial Courts of Admiralty Act 1890 (UK), through the combination of its power to confer admiralty and maritime jurisdiction on Australian courts and its substan­ tial legislative authority over admiralty and maritime matters generally. A valid conferral of federal jurisdiction on an Australian court will be regarded as excluding by implica­ tion any non-federal (that is, State or Imperial) jurisdiction with respect to the same mat­ ter.79 Section 2(2) of the Statute of Westminster 1931 (UK) makes it clear that this form of

implied repeal by the enactment of inconsistent legislation is not the only method of ex­ cluding unwanted Imperial legislation. The method of direct repeal is also available.

76. Kirmani v Captain Cook Cruises Pty Ltd (1985) 58 ALR 29. For earlier, more restrictive, views see KH Bailey, T he Statute of Westminster’ (1932) 5 A LJ 362, 364; KC Wheare, The Statute o f Westminster and Dominion Status, 4th edn, London, 1949, 205-6; WA Wynes, Legislative, Executive and Judicial Powers in Australia, 5th edn, Law Book Co, Sydney, 1976, 77. cf (on slightly different grounds) O Dixon, ‘The Stat­ ute of Westminster 1931 ’ (1936) 10 A L J 96, 101. 77. (1985) 58 ALR 29. 78. On the Australia Act 1986 (Cth) and its UK equivalent, the Australia Act 1986 (UK), see [1985] Reform

152.

79. Felton r Mulligan (1971) 124 CLR 367; Moorgate Tobacco Co Ltd v Philip Morris L td (1980) 31 ALR 161.

The Federal Constitution and Admiralty Jurisdiction / 55

Conclusion

82. Comprehensive Federal Power. The Commonwealth Parliament has sufficient power • to confer ‘admiralty and maritime jurisdiction' on appropriate Australian courts and to regulate the exercise of that jurisdiction in appropriate ways. The phrase ‘admiralty and maritime jurisdiction’ in s 76(iii) of the Constitution should be

broadly construed, though its outer limits remain unclear; • to confer jurisdiction with respect to a wide variety o f ‘maritime’ causes which may or may not fall within s 76(iii), by an exercise of substantive Commonwealth legis­ lative power under various paragraphs of s 51, especially s 51(1) and (29) of the

Constitution. A general choice of law provision would be sufficient to support such an exercise of power under s 76(ii); • to repeal Imperial Acts dealing with admiralty jurisdiction so far as they apply to Australia. In the light of this conclusion, arguments for some form of co-operative legislation be­ tween the States and the Commonwealth are unnecessary.80 The Commonwealth itself

has the power to enact admiralty legislation for Australia.81 However it cannot be deter­ mined in the abstract whether s 76(iii) standing alone would be sufficient to support such legislation, since the boundary line between ‘jurisdiction’ and ‘substance’ in admiralty is an elusive one. As was pointed out in para 80, this question arises principally in the con­

text of the relationship between in rem and in personam liability in admiralty, and will be discussed in chapter 8.

80. The need for certainty in any reform of admiralty jurisdiction was stressed by one of the Commission's consultants: Mr PA Corn ford, Crown Counsel, New Zealand, Submission I0 ( 15 March 1984) 2. He sug­ gested that, if there was significant constitutional uncertainty in the proposals, admiralty legislation should be enacted in the form of request and consent legislation to be passed by the United Kingdom

Parliament. For the reasons given here the Commonwealth does certainly possess power to bring about secure reforms in this field. 81. See Law Council of Australia and Maritime Law Association of Australia and New Zealand, Joint Com­ mittee (Chairman: Justice HE Zelling), Admiralty Jurisdiction in Australia. 1982, para 12.9: ‘we conclude

that the Commonwealth Parliament does have power to enact an Admiralty Act operative in and for the whole of Australia’. Reference has sometimes been made to s 108 of the Constitution as a barrier to the Commonwealth’s repealing relevant Imperial legislation: eg Zelling (1984) 10. But s 108 is no barrier to action under other powers conferred by the Constitution. It is merely a saving clause.

Part III

CIVIL ADMIRALTY JURISDICTION: REFORM

6. Reform of Admiralty Jurisdiction

The Need for Reform

83. A Broad Consensus. Everyone who has considered the present state of admiralty jurisdiction in Australia recognises the need for reform.1 The Zelling Committee were ‘not aware of any opinion opposed to Australia now having its own admiralty legisla­ tion’.2 Nor has this Commission received any suggestions that the current position should

be maintained. This is not surprising, given the unsatisfactory state of Australian admir­ alty jurisdiction outlined in Part II. At the level of detail there is room for disagreement as to exactly what is required. But it is clear that reform should go beyond merely clarify­ ing the existing (that is, 1890) position. What is required is an admiralty jurisdiction that is both certain and accessible, and relevant to Australian interests in the 1980s, not the

1890s. The proposed reforms should take the form of a new Act. The alternative would be to add a fresh part or division to the Navigation Act 1912 (Cth). But it is generally ac­ cepted that that Act is itself long overdue for reform.3 It has already suffered from too much patchwork amendment and clarity is unlikely to be achieved by making further

substantial alterations to it. The question whether and to what extent jurisdictional pro­ visions already in that Act should be transferred to the proposed legislation will be con­ sidered later in this Report, and especially in chapter 13. Here it is sufficient to recognise that a new Admiralty Act is necessary.

Reform or Abolition of Admiralty?

84. An Unnecessary Jurisdiction? In formulating proposals for the reform of admiralty jurisdiction in Australia it is important to be aware of several constraints. If one were to design a legal system starting with a clean slate it might not be necessary to create any distinct category of admiralty jurisdiction. As exercised in comparable overseas coun­

tries, modern admiralty jurisdiction appears both overinclusive and underinclusive. For example, a local resident drives a truck down to a local fishing port, goes fishing for the day in a trawler, returns, loads the catch in the truck and drives to market. If the trawler collides with someone or something the very plaintiff-oriented remedy of proceedings in

rem will be available. If it is the truck which is involved in a collision, the only remedy will be to proceed in personam. It is difficult to defend this on rational grounds. Why

1. Law Council of Australia and Maritime Law Association of Australia and New Zealand, Joint Commit­ tee (Chairman: Justice HE Zelling) Admiralty Jurisdiction in Australia, 1982 (Zelling Report), para 10.2: HE Zelling, O f Admiralty and Maritime Jurisdiction* (1982) 56 ALJ 101; RN Chesterman, ‘Arrest of Ships’ (1979) 5 Qld Lawyer 61, 66; CA Ying ‘Colonial and Federal Admiralty Jurisdiction* (1981) 12 FLR 234, 269-70; NH Pratt, ‘Queensland Admiralty Jurisdiction: How much do we have?* (1975) 4 Qld Law­ yer 127, 139; CW O’Hare ‘Admiralty Jurisdiction’ (1979) 6 MULR 195, 224; PG Foss & RJM Anderson,

‘Admiralty Jurisdiction in Western Australia’, mimeo, Perth, 1976, on behalf of the Western Australian MLAANZ, 36-7. 2. Zelling Report, para 10.2. 3. Commonwealth of Australia, 114 Pari Debs (H o f R) (22 May 1979) 2179-80 (Minister of Transport);

Zelling (1984) 17. See also para 56, 60.

60 / Civil Admiralty Jurisdiction

should locally-owned ships and their owners not be subject to the same jurisdictional principles as other locally-owned forms of transport? Equally, admiralty can be underinclusive because it only provides remedies in respect of maritime claims. The local resident who deals with foreign-owned aircraft, or, indeed with any foreign party who is only temporarily within the jurisdiction, is denied the ability to proceed in rem or by way of pre-judgment attachment (subject to the possible availability of a Mareva injunction4). If arrest of ships is such a beneficial remedy against foreign defendants, why should ar­ rest not be available against other forms of wrongdoing transport?5 Were there a clean slate to begin with it would be arguable that the relevant focus should not be ships or maritime claims. It might be more appropriate to select as a focus foreign defendants, or, perhaps more precisely, foreign defendants whose assets are potentially elusive and who are beyond the easy reach of local courts taking into account reciprocal arrangements for service of process and enforcement of judgments. Within such a general approach rem­ edies could be devised within the general jurisdiction of courts which were adequate to cater for any special legal problems thrown up by ships and by maritime commerce.

85. Abolition o f Admiralty? The question is then whether admiralty should simply be abolished as a separate jurisdiction. One advantage has already been indicated: abolition of admiralty would enable reform to focus on what appears to be the main area of con­ cern, elusive foreign defendants, unfettered by the need to remain within a framework which, mainly for historical reasons, focuses on ships, whether local or foreign. It can be argued that it is impossible to achieve any lasting effective reform based on an incorrect foundation. As long as admiralty remains a small and rather esoteric jurisdiction, prob­ lems will continue to occur along the boundary with the general jurisdiction of courts. Chapter 12 details a range of problems which exist at present concerning Mareva injunc­ tions, limitation of actions, insolvency, common law liens and statutory rights of deten­ tion, and pre-judgment interest.6 7 It can be argued that satisfactory solutions to these problems are not possible while admiralty remains a separate jurisdiction, and that even if satisfactory solutions could be found to the present problems, those solutions would not last. Those responsible for the development of the general law both in England and Australia have often acted without regard to admiralty, or at least without a proper understanding of its particular rules and idiosyncracies. This is likely to continue to hap­ pen. Arguably reform should remove rather than preserve a jurisdiction whose existence is largely the result of historical accident. A distinct jurisdiction to deal with ships is not an essential part of a modern legal system; many civil law jurisdictions in Western Eur­ ope have no counterpart to admiralty and its unique remedy of the action in rem.1 It is not clear how much longer English admiralty will retain its distinct characteristics as the United Kingdom becomes more closely tied to Europe.8 Despite these and other argu­ ments, however, no support at all has been forthcoming for such an approach. One reason is that this would probably involve adopting some other basis for the assertion of jurisdiction over foreign defendants, eg by way of saisie conservatoire or attachment ad

4. For Mareva injunctions and their relationship to arrest see para 245-7. 5. cf the comment of Goff J in Marazura Navegacion SA v Oceanus [1977] 1 Lloyd's Rep 283, 287: It is a commonplace that English procedure is less well equipped than many of its Continental counterparts to provide security for pending claims. The most important exception to this general

proposition is the power to arrest ships in Admiralty proceedings. 6. See also ch 9 where other boundary problems are noted, such as limitation of liability actions. 7. KD Kerameus, 'Admiralty Jurisdiction in Continental Countries’ (1983) 8 Maritime Lawyer 329, 334-1; JC Sweeney, 'Compromise Provisions Regarding In Rem Procedures’ (1979) 27 Am J Comp Law 407, 409.

See para 94, n 42 on saisie conservatoire. 8. Note particularly the potential impact of the Civil Jurisdiction and Judgments Act 1982 (UK) s 25, 26. See para 187-9 for a discussion of s 26. The fact that the United Kingdom is altering its position in line with its European treaty obligations is not itself a reason for Australia to consider a similar alteration in

the absence of any treaty obligations.

Reform o f Admiralty Jurisdiction / 61

fundandam jurisdictionem (both forms of seizure of property in order to procure the ap­ pearance of an absent defendant). This could involve major, and potentially controver­ sial, changes to the existing structure of civil jurisdiction in Australia. Except in maritime cases, Australian interests do not support the expansion of jurisdictional claims based only on the presence of assets within the jurisdiction (where the cause of action arose elsewhere). Such jurisdictional claims are (again with the exception of maritime claims) also controversial internationally. On the other hand, in the specific area of maritime

claims, admiralty jurisdiction does provide a convenient and acceptable basis for cases to be brought before Australian courts. It avoids problems of service on foreign defendants, and any requirements of a nexus between Australia and the cause of action, and it pro­ vides a way of obtaining tangible security, or a guarantee in lieu of security, for the

claim. In any event the Commission is not in a position to start all over again. This is re­ flected in its Terms of Reference9 which both limit the inquiry to admiralty matters and presuppose the continued existence of a distinct jurisdiction. The Constitution itself in

s 76(iii) makes a similar assumption. The long history of admiralty as a distinct jurisdic­ tion has created international business expectations, arrangements and practices that rely on the fact that jurisdiction will be asserted over ships and shipowners in special ways. For these reasons it is desirable to accept the broad contours of what is traditionally and

internationally accepted as falling within admiralty jurisdiction. Within the broad frame­ work of what is meant by admiralty jurisdiction the prime need appears to be for clarifi­ cation, rather than a root and branch reform involving the abolition of admiralty juris­ diction and a restructuring of the general remedial powers of courts.

86. Principles of Reform. If the approach outlined in para 85 is pragmatic, it is not de­ void of principle. Admiralty courts have some remedies and procedures not possessed by other courts. A subject matter should only fall within that jurisdiction if it requires the

advantages of these remedies and procedures. Thus the unique features of admiralty jur­ isdiction must be identified. In measuring the extent to which these features are necessary for any particular subject matter regard must be had to international constraints. Many of the special features of admiralty have the effect of improving the position of the local supplier of goods and services, salvor, repairer, crewman and so forth vis-a-vis the for­ eign shipowner. Shipowners and those countries whose policies are influenced by ship­ owners resist the expansion of admiralty remedies over fresh subject matter. Those coun­ tries relying on foreign vessels for their maritime commerce and having few local ship­ owners tend to seek an expansion of admiralty remedies. The result of this tension has been a somewhat ragged compromise. Solutions going to the extremes of favouring either

shipowners or those dealing with ships are not likely to be internationally acceptable. But there is considerable room between the extremes. This Report sets out an appropriate statement of the Australian national interest and, in the light of that interest, seeks to de­ termine an appropriate position between the extremes. Particular points can be resolved

by measuring their consistency with this position.

Unique Characteristics of Admiralty

87. Three Distinctive Features. Before dealing with specific questions of reform it is necessary then to identify the special characteristics of admiralty, and to articulate an Australian national interest with respect to admiralty, within internationally acceptable limits, which will help in the assessment of proposals developing or restating these special characteristics. Apart from any more general characteristics it may have as a specialised jurisdiction for the ‘maritime industry’, there are three specific and distinctive features

9. See para I.

62 / Civil Admiralty Jurisdiction

which apply in admiralty jurisdiction. These features should primarily determine the am­ bit of Australian admiralty jurisdiction, not, as in the United States, a focus on the mari­ time industry.

88. An Accepted Jurisdictional Foundation. The key distinguishing feature of admiralty jurisdiction is the ability it provides to proceed in rem. This has two aspects. The first is jurisdictional. The mere fact that the res is present within the territory confers jurisdiction on the local admiralty court, irrespective of where the cause of action arose.10 This is

internationally accepted as not amounting to an exorbitant assertion of jurisdiction.11 Ad­ mittedly there has been some international pressure to replace the mere presence of the res with a requirement that one of a number of more specific jurisdictional links be pres­ ent. But this has occurred as part of a compromise agreement by treaty in particular areas and does not threaten the basic point.12 The acceptance by the Anglo-Australian common law of something akin to the United States doctrine of forum non conveniens 13, while in effect adding a requirement to that of mere presence of the res, nonetheless leaves the basic point intact. Staying an action on the ground that a foreign forum would be more appropriate is an exercise of jurisdiction, not a denial that jurisdiction exists.14

89. Security for Maritime Claims. The second aspect of a proceeding in rem is that from the moment of arrest, the plaintiff acquires a security for the claim in the form of the res. The value of the res may be insufficient to meet the full claim, or others with a greater priority may leave no residue for the plaintiff, so that the security is far from per­

fect. But the plaintiff is protected from the various risks of loss that can arise between serving a writ and obtaining judgment, such as the defendant absconding leaving no as­ sets, becoming bankrupt or dissipating those assets. In practice, the arrest of the res al­ most invariably induces the defendant immediately to put up bail or provide other securi­ ty acceptable to the plaintiff. It often induces a settlement of the claim itself. The recent development of the Mareva injunction as a general remedy has not removed the unique­ ness of the security aspect of arrest in rem.'5 Hence the security aspect remains a key dis­ tinguishing characteristic of admiralty jurisdiction.

90. Priorities in Admiralty. A further feature of admiralty jurisdiction is that a set of general equitable guidelines prevails in admiralty to determine priorities where the value of the arrested res is insufficient to satisfy all claims. A claim arising out of a particular subject matter may well fare differently under admiralty than under the general law of in­ solvency.16 Hence, if a particular type of claim would be given a higher priority if brought in admiralty, it is relevant in deciding whether that type of claim should be with­ in admiralty jurisdiction to consider the effect on priorities.

10. DR Thomas, Maritime Liens. London, Stevens, 1980, para 67; Aichhorn & Co KG v The Ship M V ■ Talabol' ( 1974) 48 AU R 403. 11. See eg I Congreso del Parlido [1978] QB 500, 534 (Goff J) and [1983] 1 AC 244, 272 (Lord Wilberforce). cf Foreign Judgments Act 1962 (Vic) s 7(3)(b) and similar legislation in all other Australian jurisdictions ex­

cept South Australia. 12. See eg art 7(1) of the 1952 Arrest Convention. See also Sweeney (1979) 414-17 on the debate over the drafting of the jurisdictional provisions in the 1978 Hamburg Rules on the Carriage of Goods by Sea. But cf Comite Maritime International. Draft Convention on Salvage, Montreal, 1981, art 4-5(1) which gives

jurisdiction to, amongst others, ‘the place where the property salved has been arrested". 13. The Atlantic Star [1974] AC 436; The Abidin Dover [1984] 1 All ER 470 (HL); The Courageous Coloctronis [1979] WAR 19. For discussion of the position in Canada see Kuhr v The Ship 'Friedrick Basse '(1982) 134 DLR (3d) 261, 268-71 (Fed Ct, Addy J). See generally GW Paulsen & RS Burrick, ‘Forum Non Con­

veniens in Admiralty’ (1982) 13 JM LC 343. 14. The Abidin Dover [1984] 1 All ER 470, 480 (Lord Brandon). 15. See para 245-6 16. See para 256 for an outline of Admiralty priorities.

Reform o f Admiralty Jurisdiction / 63

Australia’s National Interest

91. The Need for Balance. There are two broad factors which have to be taken into consideration in calculating Australia’s interest in the reform of admiralty jurisdiction: the particular interests of those engaged in international shipping in Australia, and the international acceptability of whatever position is proposed.

92. Foreign Defendants the Primary Concern. On the first point, the international focus of admiralty jurisdiction should be paramount. It may well be desirable that claims in­ volving local pleasure craft, local fishing boats, ferries and the like should be able to be brought within the scope of a reformed admiralty jurisdiction. But the rationale for a dis­

tinct admiralty jurisdiction has historically always been, and should continue to be, to deal with overseas ships and claims that arise in connection with them. The unique char­ acteristics of admiralty are largely directed to the situation where the shipowner or the defendant is outside the territory and has no assets within the jurisdiction apart from the ship itself. As Australia is made up of a number of jurisdictions, local claimants may be able to avail themselves of admiralty jurisdiction to deal with defendants in another State or Territory. But this is very much an incidental benefit and should not significantly influ­ ence the proposed legislation. Were inter-State concerns paramount, the appropriate di­ rection for reform would be the Service and Execution of Process Act 1901 (Cth), the Act designed to overcome problems associated with pursuing defendants across State or Ter­ ritory borders. A further aspect of admiralty which should not be allowed to dictate the direction of reform is in personam jurisdiction in admiralty. This is useful and should not be disparaged. But the uniqueness of admiralty lies in the action in rem. Hence most of the discussion which makes up the remainder of this Report is focused on in rem pro­ ceedings. 93. Domestic Interests. Australia’s ‘basic maritime transport policy orientation’ is dic­ tated by its ‘status as a shipper rather than as a maritime nation ... as a user rather than supplier of shipping services’.17 Only a very small proportion of the total cargo move­

ments into and out of Australia is carried in Australian flag vessels.18 It seems highly un­ likely that this situation will change significantly despite some Government interest in in­ creasing the size of the Australian merchant fleet19, and despite the entry into force of the UNCTAD Liner Code Convention.20 No one suggests that Australian flag vessels are

about to engage in tramp shipping operations between foreign ports.21 At present a signi-17. Commonwealth of Australia, Department of Transport, ‘Economic Policy Developments in International Shipping - Australia’s Approach’ (1981) 52 Ausr Foreign A ff Rev 395, 396. 18. See JG Crawford, Revitalisation o f Australian Shipping: An Overview (Crawford Report) AG PS, Canberra,

1982, 42 where the following figures are given for the percentage of revenue tonnes of overseas cargo car­ ried by Australian flag vessels: Year Imports(%) Exports(%) Total! %)

1975-76 3.6 0.25 1.0

1976-77 3.7 1.3 1.5

1977-78 3.5 2.1 2.6

1978-79 3.9 2.4 2.7

1979-80 7.0 3.4 3.5

In 1980-81 the total percentage was 3.87%: Year Book Australia 1983. AGPS, Canberra, 1983, 526. 19. id, 1. For a critical look at the possibilities of revitalisation see P Stubbs (1983) Australia and the Maritime Industries, AIDA Research Centre, Melbourne, 1983, 162-78. 20. International Convention on a Code of Conduct for Liner Conferences, Geneva, 1974 ((1974) 13 ILM

917), entered into force 6 October 1983. Art 2 provides for a split of liner cargoes in the ratio of 40% each to ships of the exporting and importing states with only the remaining 20% available to ships registered in third countries. Australia is not a party to the Convention and is unlikely to become one in the foresee­ able future: Dept of Transport (1981) 397-8; Stubbs (1983) 30-1. 21. cf Norway where about 90% of the Norwegian merchant fleet is engaged in trade solely between non-

Norwegian ports: S Brackhus, ‘Choice of Law Problems in International Shipping (Recent Develop­ ments)’ (1979) 164/4 0 /2 5 1 ,2 6 1 .

64 / Civil Admiralty Jurisdiction

Scant proportion of Australia’s overseas trade is carried in ships registered in ‘open regis­ try’ or ‘flag of convenience’ states.22 While not all open registry ships are deserving of the criticism commonly heaped upon them23, it is nonetheless the case that such vessels are far more likely to be involved in legal disputes than the general run of merchant ships.24

Despite considerable international pressure it is most unlikely that open registry ships will disappear from the international shipping scene.25 Australia therefore has a powerful interest in using the unique features of admiralty law so as to enable those in Australia who have dealings with foreign vessels to have a reasonable prospect of bringing the dis­ pute before an Australian court and of recovering on any judgment obtained against the ship owner or charterer. On the information available it seems that the need to be able to proceed in rem is greatest with respect to claims for the supply of goods and services in Australian ports to foreign vessels, and claims for damage to cargo carried aboard those vessels. The person liable, whether ship owner or charterer, is often difficult to locate and when found often proves to be a $2 company with elusive principals and no assets other than the vessel itself. It can often be unrealistic to litigate against such a defendant in per­ sonam and hope actually to recover on any judgment which may be obtained.

94. International Constraints. If the interest of potential plaintiffs is in having the wid­ est possible jurisdiction in rem, there are international constraints on how far this can be done. Arrest in rem in admiralty carries with it in the common law world an assertion of jurisdiction to determine the merits. This is accepted internationally as an exception to

the general principle that arrest ad fundandam jurisdictionem is regarded as an exorbitant assertion of jurisdiction.26 2 7 But a wholesale expansion of the ability to arrest in rem in ad­ miralty may run the risk of being seen abroad as exorbitant. The sale of a vessel in ad­ miralty proceedings is generally treated internationally as valid and as giving a clear title to the ship. But this would not necessarily apply if the international perception was that,

in the guise of admiralty proceedings, Australia was in effect allowing a remedy of arrest ad fundandam jurisdictionem.1'' The need for international uniformity also imposes a re­ straint. It is to the benefit, not only of shipowners but also of all parties engaged in inter­ national maritime trade, if ships entering Australian ports are not subject to a legal re­ gime which differs widely and unjustifiably from the international norm. Unfortunately, although English judges have sometimes used expressions implying that there is a ‘mari­ time law of the world’28, there is a conspicuous lack of uniformity on maritime law even between western countries.29 As a consequence there is considerable scope for choice in considering what should be Australia’s position. To assess just how much scope there is, it is useful to note first the position with respect to liens, because whatever additional

22. See OECD, Maritime Transport 1982, OECD, Paris, 1983, 73: open registry flags accounted for 26.8% of Australian imports and 30.7% of Australian exports in 1981. See id, 68-71 for a definition of ‘open regis­ try’: such ships make up about 25% of the world merchant fleet. 23. For a sample of the criticism see National Union of Seamen, Flags o f Convenience, NUS, London, 1981,

reprinted in Crawford Report, Attachment B, 81-96. 24. See eg E Ellen & D Campbell, Maritime Fraud, Sweet & Maxwell, London, 1981, 2, 61. 25. R Humphrey, ‘The Outlook for Western Shipping: Changes in Political Structure" (1982) 116 OECD Ob­ server 47, 49. The United Nations Convention on Conditions for Registration of Ships, Geneva, 7 Febru­

ary 1986 (UN Doc DA FFE/M TC/86.6 (Add)) seeks to strengthen the ‘genuine link" principle between a State and ships flying its flag, and to ensure more effective control by the flag State over its ships. 26. See para 85, para 94 n 42. 27. cf South African Law Commission, Report on the Review o f the Law o f Admiralty, Project 32, 1982, para 6.4. 28. The Tojo Maru [1970] P 21, 62 (Lord Denning MR). See also The Totten [1946] P 135 where Scott LJ used the phrase 'general law of the sea’ throughout his judgment. 29. Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221, 238 (Lord Diplock), 244 (Lords Salmon and Scarman, dissenting).

Reform of Admiralty Jurisdiction / 65

characteristics it may have, every maritime lien gives rise to a right of arrest.30 One can­ not do better than to quote Lords Salmon and Scarman on the difficulty of a policy of uniformity.

Unfortunately the maritime nations, though they have tried, have failed to secure uniformity in their rules regarding maritime liens: see the fate of the two Conventions of 1926 and 1967 ... each entitled (optimistically) an International Convention for the Unification of Certain Rules of law relating to Maritime Liens and Mortgages. Though it signed each of them, the United

Kingdom has not ratified either of them ... In such confusion policy is an uncertain guide to the law. Principle offers a better prospect for the future.31

The common law world itself shows a great diversity, with only a handful of maritime liens recognised in England and Australia, but a large number in the United States.32 By no means all rights of arrest in rem in Anglo-Australian law depend upon the existence of a maritime lien.33 But those countries which recognise a large number of maritime liens can hardly complain if Australian law gives a statutory right of arrest having only some of the characteristics of a maritime lien over claims which elsewhere give rise to full mari­ time liens. Apart from the Maritime Lien Conventions the main text of interest is the

1952 Arrest Convention. Lord Diplock recently referred to ‘international comity as evi­ denced by the wide acceptance’ of this Convention.34 But it should be noted that accept­ ance is not particularly wide.35 As at 1 January 1986 there were 57 states party to the Convention36 including many states of little significance in world shipping but also in­

cluding Belgium, Federal Republic of Germany, France, Greece, Italy, the Netherlands, the United Kingdom and Yugoslavia. None of the major open registry states is a party. Nor is the United States or the Soviet Union. In Australia’s region, Japan, China (in­ cluding Taiwan), India, the ASEAN states, New Zealand and the Republic of Korea are

not parties. Overall, only 6 of the 20 largest ship-owning nations are parties.37 Australia is not a party and does not seem to have seriously considered becoming a party.38 But apart from the number of states supporting the Convention there are other problems with it. These will be discussed in more detail below in particular contexts. In general the Con­ vention represents a compromise between civil and common law regimes of maritime law. In particular

The provisions of art 3 represented a compromise between the wide powers of arrest available in some of the civil law countries (including for this purpose Scotland) in which jurisdiction to entertain claims against a defendant could be based on the presence within the territorial juris­ diction of any property belonging to him, and the limited powers of arrest available in

30. O 'Hare (1979) 199 observes that historically it is more accurate to see the existence of a maritime lien as the result of the ability to arrest rather than as creating the right to arrest. 31. Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221, 244. For the text of the Convention done at Brussels, 10 April 1926, see 120 LNTS 187; for that done at Brussels, 27 May

1967, see Benedict on Admiralty, 7th edn, MM Cohen ed, Matthew Bender, New York, 1983, vol 6A, Doc 8-3. Australia is not a party to either Convention. 32. [1981] AC 221, 232, 240 (Lord Diplock). 33. See para 14, 15, and see further para 119, 127.

34. Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221, 241. 35. The fact of non-membership does not indicate that a state is strongly opposed to the Convention regime. Conversely, the United Kingdom, though a party, has in several respects failed to implement the Conven­ tion. On the failure fully to implement art 3 see para 131. On the failure to implement art 7 see The

Golden Trader[ 1975] QB 348, 360 (Brandon J). 36. According to the official list of parties issued by the Belgian Government, the depository for the Conven­ tion. The most recent state to accede was Cuba in November 1983. 37. Figures on ship ownership as measured in deadweight tonnes taken from OECD, Maritime Transport

1982. OECD, Paris, 1983, 147. 38. In 1971 a Parliamentary Question asked if Australia could be in a position to ratify the 1952 Arrest Con­ vention after the then current amendments to the Navigation Act. The answer was that it was not possible to say but the question of ratification would 'be kept in mind': Commonwealth of Australia, 72 Part Debs

(H o f R) (7 May 1971) 2853.

66 / Civil Admiralty Jurisdiction

England and other common law jurisdictions, where the power to arrest was exercisable only in respect of claims falling within the Admiralty jurisdiction of the court and based on a sup­ posed maritime lien over the particular ship in respect of which the claim arose.39

In achieving this compromise the drafting is not always as clear as it might be40, and there are important divergences between the equally authentic French and English texts. Some merely reflect inapt translation41 but others reflect the difficulty of conveying some of the concepts used in the Convention into language familiar to the English admiralty lawyer.42 There is a further difficulty in that not all the claims which give rise to a mari­ time lien under the 1926 Liens Convention are listed in what purports under article 2 to be the exclusive list of claims (art 1(1)) in the 1952 Arrest Convention for which a ship may be arrested.43 Even where they are listed, the language used is not identical in both Conventions, thereby giving rise to doubts as to which text is authoritative.44 There are also claims which give rise to maritime liens in the municipal law of some states which are not included in the Arrest Convention’s list of maritime claims.45 In addition, some of the provisions of the 1952 Arrest Convention are difficult to reconcile with other, more recent, maritime conventions.46 In other words, even if it enjoyed wider support, there are

39. 40.

43.

44. 45. 46.

The Eschersheim [1976] 1 All ER 920, 923 (Lord Diplock). Donaldson LJ complained in The Span Terra [1982] 1 Lloyd’s Rep 225, 231, that art 3(4) ‘is not only ec­ centrically drafted, but eccentrically laid out on paper'. Penlington J in The Sextum [1982] 2 Lloyd's Rep 532, 534 (Hong Kong S Ct) confessed ‘to some difficulty in understanding the wording of that article’. It can be argued that at least some of the difficulty experienced by English and Commonwealth judges in in­ terpreting the 1952 Arrest Convention occurs because the 1956 Act (and legislation in other countries based on that Act) is unclear in its wording and does not clearly follow the Convention despite the stated intent: see Poh Chiu Chai, ‘Arrest of Ships: A Comparative Study of English and Singapore Cases’ [1982]

1 M LJ xvi, xviii. See eg Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221, 241 (Lord Diplock). In its reply to the Comite Maritime International questionnaire on the possible revision of the 1952 Arrest Convention, the Italian Maritime Law Association noted several discrepancies between the English and French texts of art 1(1 )(p) and art 9 (CMI Doc Arrest-4/1-84, 5, 12, 13 (2 Jan 1984)). The title and the preamble of the French text of the Convention refer to uniform rules ‘sur la saisie con­ servatoire de navires de mer’. The French and English texts are equally authentic but saisie conservatoire would have been more appropriately translated by 'pre-judgment attachm ent’ or even by a reference to

Mareva injunctions (had they existed in 1952) than by arrest. The drafting of art 1 and 3 does not seem to make any allowance for the fact that in English admiralty law arrest not only confers a security interest in the res but also gives the arresting court jurisdiction to decide the underlying merits. On the widespread distinction in civil law countries between jurisdiction to order saisie conservatoire and jurisdiction to de­ cide the merits see the discussions by Lord Diplock in The Siskina (Cargo Owners) v Distos Compania

Naviera SA [1979] AC 210, 258-60 and Bankers Trust International Ltd v Todd Shipyards Corp; The Hal­ cyon Isle [1981] AC 221, 239. See also DC Jackson, Enforcement o f Maritime Claims, Lloyd’s of London Press, London, 1985, 240-1. For saisie conservatoire in French law see P Herzog, Civil Procedure in France, Nijhoff, The Hague, 1967, 198-202, 235-8. Civil law jurisdiction to order saisie conservatoire must be distinguished from another type of jurisdiction, found in far fewer civil law countries, under which ju r­ isdiction to determine the merits is acquired simply by the arrest of any of the defendant’s property with­ in the territory of the forum court. In countries (such as Scotland and South Africa) where this arrestment ad fundandam jurisdictionem is part of the law it can be used to arrest ships. For both an illustration and discussion see Alexander Ward & Co Ltd v Samyang Navigation Co Ltd [1975] 2 All ER 424, 431 (Lord Kilbrandon). Note his comment that this type of jurisdiction ‘has long been recognised as being of an “exorbitant” character’. F Berlingieri, ‘The 1952 Brussels Convention on Arrest of Ships’ (CMI Doc Arrest — 2/X I-83, December

1982) 9 lists the items, referencing the 1926 Liens Convention art 2(1) (‘law costs due to the State’, ‘ex­ penses incurred in the common interest of creditors’, ‘costs of watching and preservation’) and to some extent art 2(5). Italian MLA questionnaire response, 2-4. eg, stevedoring charges which give rise to a maritime lien in the United States. See para 208 n 47 on the ‘sister ship' arrest provision. Note also that the jurisdictional provisions of the Convention Relating to the Carriage of Passengers and their Luggage by Sea, Athens, 13 December 1974 (text: Benedict (1983) vol 6, Doc 2-2) art 17 makes no provision for jurisdiction over claims bought under the Convention to be based on the arrest of the wrongdoing ship. Australia has signed but not ratified this Convention.

Reform of Admiralty Jurisdiction / 67

difficulties with relying on the 1952 Arrest Convention as a satisfactory guide to what is internationally acceptable. Finally, the Convention is undergoing revision, a process which is itself lengthy, and which is likely to lead to further delays in ratification of the text either in its original form or as revised.47 Despite these criticisms close attention has been paid to the Convention, and to the proposed revisions, in deciding how far Aus­

tralia should go in extending the ability to arrest in rem.

95. Overseas Legal Sources. A different sort of constraint is imposed by the fact that, measured in terms of admiralty litigation, Australia is a small country. Even when the outmoded aspects and the obscurities of the present law have been removed this is likely to remain true. There would be some advantage to be gained if Australia did as Malaysia,

Singapore and New Zealand have done and copied closely the relevant English admir­ alty legislation. Australian courts and practitioners would be able to obtain guidance not only from the large body of judicial decisions in England and these other countries but also from English textbooks and other writings. Yet there are difficulties in adhering

closely to the English model. The balance which it strikes between shipper and shipowner interests is not, as already noted, one which is necessarily in Australia’s interests. The ad­ miralty provisions of the Supreme Court Act 1981 (UK) do not form a complete state­ ment of the English law on admiralty jurisdiction.48 The legislation leaves many questions to be answered, a few by reference to other legislation, but most by looking to reported

cases, many of which date back to the 19th century. If the proposed legislation were to at­ tempt a complete statement of the laws relevant to admiralty jurisdiction it would avoid recourse to this case law, not all of which is either readily accessible to the Australian practitioner or easily interpreted once found. There is a risk that such a restatement

would isolate Australian admiralty jurisdiction from the guidance to be obtained from overseas courts and writers working with reference to that case law. On the other hand, where the present judicially-created law on admiralty jurisdiction is obscure, what is re­ quired is clarification by reference to principle and policy rather than attempting a faith­ ful adherence to the 19th century authority. The issue is much wider than simply one of adhering to an overseas model. It raises the whole question of codification versus the

47. The Lisbon meeting of the Comite Maritime International (CMI) in 1985 produced a Draft Revision of the Brussels Convention (see para 5). The Draft Revision differs from the Brussels Convention itself in many respects, including especially the following: • the definition of ‘maritime claim' is now indicative and inclusive rather than a specific, exhaustive list

(art 1(1)); • ‘maritime claims’ specifially included in art 1(1) include all forms of damage done or threatened by a ship (including costs of preventive action and pollution clean-up costs), a broader definition of wages, and marine insurance premiums and calls (art 1(1 )(d), (o) & (q)); • arrest is broadly defined, so as to include Mareva injunctions (art 1(2));

• there is more explicit provision for maritime liens (5 listed classes) (art 3(1 )(a)); • unless local law provides to the contrary, a ship may only be arrested on a statutory right of action in rem in respect of liabilities of the owner or bareboat (ie demise) charterer, and the relevant time is the time of arrest, not of institution of the proceedings (art 3(1 )(d), (3));

• specific provision is made for rearrest and multiple arrest, with multiple arrest permitted to the full value of the claim (art 5(2)); • there is more extensive provision for plaintiffs to be required to furnish security for costs, damages etc (art 6);

• arrest confers local jurisdiction over the merits of the claim unless the local law provides to the con­ trary, irrespective of any nexus of the claim to the forum (art 7). The CMI Draft has no special status, except as a working text to be submitted to a diplomatic conference of States called to revise the 1952 Convention. 48. See for example, The Alletta [1974] 1 Lloyd's Rep 40, 49 (Mocatta J) where it is noted that the then rel­

evant English legislation, the Administration of Justice Act 1956 (UK), makes no mention of arrest except in the peripheral context of Crown property. The particular point at issue, when, if at all, it was possible to arrest or rearrest a ship for which bail or security had been posted, had to be resolved by reference to earlier decisions. The point is similarly not dealt with by the 1981 Act. See para 213, where it is recom­

mended that the rule in The Alletta not be followed in Australian legislation.

68 / Civil Admiralty Jurisdiction

common law (including in this context admiralty decisions). The general approach that has been taken in this Report is that there is a need to strike a balance between following the English legislation and seeking to clarify and simplify the law. In some respects ad­ miralty concepts, and even the meaning of specific words, are well settled, and there is much to be gained from simply incorporating or adopting them. In others, however, the law is uncertain, obscure or unsatisfactory. Where this is so, it is desirable to spell out the solution in legislation, so as to avoid litigation and to enable advice to be given confi­ dently and without what are essentially jurisdictional distractions. This approach does not involve either the direct copying of overseas texts or a complete codification of ad­ miralty jurisdiction. Exactly where the line is to be drawn between these alternatives can­ not be determined in the abstract, but depends on the particular issue or context. Refer­ ence will therefore be made to this underlying question as it arises in this Report. 96. Conclusion. To summarise, Australia has distinct interests in admiralty and mari­ time jurisdiction, in view of its position as a country of shippers rather than shipowners, and as a country dependent on foreign shipping for much of its import and export trade.

But these interests operate at different levels and to some extent in different directions. At the most general level, Australia’s position supports maintaining admiralty jurisdiction in rem (a universal jurisdiction based on local service on the res) as an exception to a gener­ al principle of territorial jurisdiction.49 More specifically, there is a strong interest in pro­ viding effective local remedies for persons dealing with ships, whether as importers, ship suppliers, crew members or otherwise. But other factors counteract this, to some degree at least. Excessive regard to the interests of plaintiffs may carry the risk that Australia will be unattractive to foreign shipping, and that freight rates will be adversely affected. Aus­ tralian admiralty jurisdiction needs to remain within generally acceptable limits, to en­ sure recognition of judgments and judicial sales in admiralty and to maintain the pos­ ition of admiralty as an exceptional and special jurisdiction. Obviously these arguments are of a somewhat general kind, leading to no very precise recipe for Australian legisla­ tion.50 An appropriate balance can be struck in various ways and at various levels. For example, a broad admiralty jurisdiction is desirable, but the interests of ship owners and financiers may be sufficiently met through procedural means (including guarantees against vexatious arrest, and machinery for providing alternative forms of security). Fi­ nally, it is in the interests of all that admiralty jurisdiction be stated in clear, precise and readily accessible form.

49. For Australian insistence in other contexts on this general principle see eg Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth). 50. A number of submissions to the Commission emphasised the different arguments outlined in this para, though without any agreement as to their outcome. Submissions favouring what might be described as

‘plaintiff interests included: P Foss, Submission 3 (4 May 1983) 3; MR Blair, Australian Shippers’ C oun­ cil, Submission 28 (19 February 1985); S Westgarth, Westgarth Baldick, Submission 42 (12 April 1985) 1-2; WM Ross, Executive Secretary, National Bulk Commodities Group, Submission 85 (9 May 1986). Submissions to the contrary included, for example: PG Willis, Deputy Corporate Solicitor, BMP, Sub­ mission 23 (12 February 1985) 3-5; Ebsworth & Ebsworth (S Hetherington), Submission 31 (1 March

1985) 3-5; AB Willings, Chairman, Universal Shipbrokers (Australia) Pty Ltd, Submission 32 (6 March 1985). See also para 135-6, 139-40.

7. The Subject of the Action In R em

97. Introduction. The key feature of admiralty jurisdiction is the action in rem. This chapter discusses the subject of an action in rem, the res. The res is typically a ‘ship’ and the chapter begins by discussing the definition of ship as a subject of an action in rem (para 98— 108). In some situations the res may consist of cargo, freight, or wreck. Some

discussion is necessary therefore of proceedings in rem against property other than ships (para 109-10). A third issue is whether these general definitions of res need to be quali­ fied by reference to the geographical location of the res, or of the cause of action (para 111-5).

The Definition of ‘Ship’

98. The Need for Definition. The term ‘ship’ is used for two purposes in defining admir­ alty jurisdiction. First, it provides a convenient means of describing the subject matter of admiralty jurisdiction. Heads of admiralty jurisdiction operate by reference to ships, for example, ‘goods supplied to a ship’ or ‘damage done by a ship’. The reference to ship ef­ fectively restricts the jurisdiction to maritime matters. The second use of ‘ship’ is to iden­ tify the most important of the types of res against which in rem proceedings can operate.

Both uses are considered in this chapter, as the definition of ‘ship’ is common to both, and there appears to be no reason to define it differently in its different contexts.

99. Vessels Used in Navigation. At present ‘ship’ is defined for purposes of Australian admiralty jurisdiction by the Admiralty Court Act 1861 (UK) s 2 as including ‘any de­ scription of vessel used in navigation not propelled by oars’. This simple definition may be compared with that in the Navigation Act 1912 (Cth) s 6(1):

“ship” means any kind of vessel used in navigation by water, however propelled or moved, and includes — (a) a barge, lighter or other floating vessel; (b) an air-cushion vehicle, or other similar craft, used wholly or primarily in navigation by

water; and (c) an off-shore industry mobile unit, but (except in section 192B, in Division 3, 4, 5, 6, 10, 11 or 13 of Part IV, in Part VII or IX, in Division 1, 3, or 4 of Part X or in Part XI) does not include an off-shore industry mobile unit that is not self-propelled ...

The added complexity of the Navigation Act definition was introduced largely to deal with hovercraft and rigs (off-shore industry mobile units): these are dealt with below. For other aspects of what is included in ‘ship’ the existing law provides a better guide, per­ haps because dumb barges, pontoons, floating cranes, buoys and the like have been about much longer than off-shore oil rigs. Moreover the courts have taken a broad view of what constitutes a ‘ship’ for the purposes both of admiralty jurisdiction and the Merchant

70 / Civil Admiralty Jurisdiction

Shipping Act 1894 (UK) and its Australian counterpart, the Navigation Act 1912 (Cth).1 The Navigation Act definition of a vessel is adequate given this background of case law, and should be adopted. Whatever problems are created by such novelties as lighter- aboard-ship vessels can be resolved by the courts within the framework provided by this definition. An alternative would be to give a large number of instances of what is a ship so as to reduce any residual uncertainty, but this seems both cumbersome and unneces­ sary. However two specific clarifications are desirable. Whatever the position with vessels under construction but not yet launched2, a vessel should be subject to admiralty jurisdic­ tion from the moment of its launch, whether or not it has yet been ‘used in navigation’. The phrase 'used or constructed for use in navigation’ should be adopted to make this clear.3 Approaching the other end of the vessel’s life, when it is sunk, stranded or wrecked, the admiralty rule has always been that a ship remains a ship in such cases while it is identifiable as such4, and this too could usefully be made clear. Even with these clarifications, a number of specific extensions or exclusions from the definition, to deal with aircraft, seaplanes, hovercraft, rigs, pleasure craft and inland waterways vessels, need to be discussed.

100. Aircraft and Seaplanes. The effect of the proposed definition would be to exclude aircraft from admiralty jurisdiction. It has been noted that as a matter of broad principle ... it may be that facilities in rem for the enforcement of any claim against owners of, or those in possession of aircraft, should be provided. Aircraft, like ships, do not usually remain for

long in any jurisdiction. They generally move out of one into another.5

But nowhere has the law developed so as to place aircraft within admiralty for all pur­ poses.6 On the international level, for example, civil aviation is subject to it own regime of treaties and supervising organisations. The chief reasons for providing admiralty juris­ diction over aircraft are, first, that aircraft may crash over the sea and the maritime sal­ vage regime might be considered appropriate, and secondly, that seaplanes while on water are more like ships than aircraft. At present in Australia there is no legislation deal­ ing with aircraft salvage7, though there is an obligation on ships at sea to assist persons in

1. See generally DR Thomas, Maritime Liens. Stevens, London, 1980, para 180, 279, 329; KC McGuffie, PA Fugeman & PV Gray, Admiralty Practice. Stevens, London, 1964 & Supp 1975, para 69. See, among many other examples, The Gas Float Whitton No 2 [1896] P 42 (floating gas-light not a ship for salvage pur­ poses); National Harbours Board v Saint John Shipbuilding & Dry Dock Co Ltd (1981) 43 NR 15 (Full FCt) (floating crane and barge, neither self-propelled, both ‘ships’) and the cases cited in the following paras. 2. See para 108. 3. This phrase is to be preferred to that in the Shipping Registration Act 1981 (Cth) s 3(1) (‘capable of navi­

gating the high seas’). ‘Incapable’ ships should also be within admiralty jurisdiction. Under this definition there is no requirement that the ‘ship’ be in the water at the time of service or arrest. In Tozer Marine Ltd v Utf Soderberg Marine; The Magnifik Midget No 15 a 23 ft sloop was arrested in an artificial pool inside the hall of the Earls Court Boat Show. After the show finished the Admiralty Marshal had the yacht put into storage. See The Times. 13 January 1966, 10; 18 January 1966, 4; 10 February 1966, 5. 4. See the cases referred to in M Thomas and D Steel, Temperley’s Merchant Shipping Acts. 7th ed, Stevens,

London, 1976, para 684. In The Pelton S S Co v North o f England P & I Assoc (1925) 22 Lloyd’s Rep 510, 513, it was said that a wreck remains a ‘ship’ as long as ‘any reasonably-minded owner could continue salvage operations in the hope of completely recovering the vessel by those operations and subsequent re­ pair’. 5. In re Glider Standard Austria S H 1964 [1965] P 463, 466 (Hewson J). See also HE Zelling, ‘Constitutional

Problems of Admiralty Jurisdiction’ (1984) 58 ALLS, 13. 6. Civil Aviation Act 1949 (UK) s 62(2) and its successor Civil Aviation Act 1982 (UK) s 91 allow regula­ tions to be made conferring jurisdiction on any court exercising admiralty jurisdiction over, and applying admiralty rules of practice and procedure to, ‘any claim in respect of aircraft’. No such regulation has

been made. 7. Australian and New Zealand Commentary on Halsbury’s Laws o f England, Butterworths, Sydney, 1976, Aviation, Pt 1, C l282. The Prize Act 1939 (UK) s 1(1) assimilates aircraft and their cargoes to ships and ship’s cargoes. This Act will be discussed in the separate Report dealing with Criminal Jurisdiction and

Prize (see para 7).

The Subject o f the Action In Rem / 71

or from an aircraft in distress.8 In the absence of legislation it seems that admiralty has no jurisdiction to deal with claims for aircraft salvage even where the salvage occurs at sea.9 Nor is there any common law right to salvage in respect of aircraft. In the United Kingdom this position has been altered as a matter of substantive law by applying mari­

time salvage law to salvage services rendered to an aircraft, its passengers, crew, apparel or cargo on or over the sea, tidal water or the shores of the sea or tidal water.10 Jurisdic­ tion over salvage claims arising out of such services is conferred by separate legislation on the Admiralty Court.11 It appears that the issue of salvage of aircraft at sea rarely

arises.12 In the absence of any demonstrated need the present law appears satisfactory.13 However, one situation in which aircraft might be brought within admiralty jurisdiction is when, as seaplanes, they behave more like ships than aircraft, that is, when afloat. Leg­ islation in the United Kingdom, New Zealand and Canada gives admiralty jurisdiction in such cases in claims for towage and pilotage.14 This is done by specific reference to air­ craft in respect of such heads of claim, not by extending the definition of a ‘ship’ to cover aircraft while water-borne. Therefore jurisdiction is not given under other heads of claim (such as collision) which operate solely by reference to ‘ship’. If the scope of admiralty jurisdiction is to be primarily determined by reference to the utility of in rem proceedings

in dealing with foreign based parties, it seems unnecessary to allow flying boats to be brought within this jurisdiction. In England it is said that ‘actions in rem against aircraft are practically unknown’.15 The use of pilots in the nautical sense in connection with sea­ planes must be a great rarity. Towage of a seaplane whose owner is not resident within

Australia would be equally rare now that flying boats are no longer used on international routes. While it is appropriate to treat waterborne aircraft as vessels for some purposes, such as collision regulations16, it is unnecessary to bring claims in respect of such aircraft

8. Navigation Act 1912 (Cth) s 265(1). 9. Weston v RCA Victor Co, Inc (1934) 50 Lloyd’s Rep 77 (Aberdeen Sheriffs Court) relying on The Gas Float Whitton No 2 [1896] P 42. See also Polpen Shipping Co Ltd v Commercial Union Assurance Co Ltd [1943] 1 All ER 162 (a marine insurance case). In the United States dicta in Lambros Seaplane Base v The

Batory 215 F 2d 228 (1954) suggest the opposite conclusion. See generally G Gilmore & CL Black, The Law o f Admiralty, 2nd edn, Foundation Press, Mineola, 1975, 539-41. See also Smith r Smith (1979) 101 DLR (3d) 189 (no maritime jurisdiction over ‘salvage’ of aircraft on inland lake). 10. Civil Aviation Act 1982 (UK) s 87. See previously Civil Aviation Act 1949 (UK) s 51 and in a more re­

stricted form Air Navigation Act 1920 (UK) s 11. Note also the Aircraft (Wreck and Salvage) Order 1938 (UK) (SR & O 1938 No 36) which alters the Merchant Shipping Act 1894 (UK) so that in a number of its sections ‘vessel’ and ‘ship’ include ‘aircraft’. 11. Supreme Court Act 1981 (UK) s 20(2)(j). Jurisdiction is also conferred on the County Court: County Courts Act 1984 (UK) s 28. 12. Gilmore & Black (1975) 541. Although modern techniques of retrieving objects on the sea-bed may change this position, it is desirable that these be carried out by agreement with the owners of the wrecked craft. No need for an involuntary salvage regime appears to exist. 13. If reform were thought necessary, the United Kingdom approach of assimilating aircraft on or over the sea to vessels for salvage purposes would be appropriate, and there is a range of international treaty and other material to support such a solution. See for references Lambros Seaplane Base v The Batory 215

F 2d 228 (1954). However, the main international instrument on the point, the Convention for the Unifi­ cation of Certain Rules Relating to Assistance and Salvage of Aircraft or by Aircraft at Sea, Brussels, September 1938, is not yet in force due to insufficient ratifications: see Shawcross and Beaumont on Air Law, P Martin ed, Butterworths, London, 1983 (looseleaf), appendix A, 79 for text. 14. Supreme Court Act 1981 (UK) s 20(2)(k)-(l): Admiralty Act 1973 (NZ) s 4(1 )(j)-(k); Federal Court Act

1970 (Can) s 22(2)(k)-(l). 15. Dicey and Morris on the Conflict o f Laws. I Oth edn, JHC Morris ed, Stevens, London, 1980, 231. There seem to be no reported cases apart from the totally ill-founded case involving a glider referred to in n 5. 16. International Regulations for Preventing Collisions at Sea, 1972, r 3(a): ‘the word “vessel" includes ... sea­

planes’. The text of the Regulations and the associated Convention forms Sch 3 to the Navigation Act 1912 (Cth).

72 / Civil Admiralty jurisdiction

within admiralty jurisdiction.17 In this context the 1952 Arrest Convention provides an appropriate guide. It leaves all aspects of jurisdiction over aircraft to be regulated by conventions on aircraft. The proposed legislation should adopt the same approach.

101. Hovercraft. The position with hovercraft is somewhat different, since they are pri­ marily designed to operate on or adjacent to water, and since they navigate in essentially the same way as ships. Hovercraft are accordingly treated as ships for the purpose of ad­ miralty jurisdiction in a number of overseas countries.18 There are, it seems, none in regu­ lar use in Australia at the moment, but this may change. There is no harm from the inter­ national point of view in including hovercraft within the definition of ‘ship’ for the pur­ poses of admiralty jurisdiction, and it is recommended that this be done. The definition should not extend to hovercraft used only over land, swamp or marshy terrain. The defi­ nition of ‘vessel’ in the Navigation Act 1912 (Cth) s 6 includes ‘... an air-cushion vehicle, or other similar craft, used wholly or primarily in navigation by water’.19 This definition, combined with the limitation on claims arising on inland waters20, would eliminate the possibility of admiralty jurisdiction covering matters unconnected with the sea.

102. Oil Drilling Rigs. Off-shore drilling units present more difficult problems. These spend most of their existence either resting on or moored to the sea-bed, but occasionally move from place to place in ship-like fashion either under tow, or less commonly, under their own power. The 1952 Arrest Convention, the 1926 and the 1967 Liens Conventions,

and the 1952 Collision Civil Jurisdiction Convention all fail to define ‘ship’. They there­ fore leave unclear the extent to which they cover off-shore drilling units. The Comite Maritime International in 1977 proposed a Draft International Convention on Off-Shore Mobile Craft, which defined ‘craft’ so as to include off-shore drilling rigs.21 It would have assimilated such craft to ships or vessels for the purposes of existing Conventions on col­ lisions, salvage, arrest, limitation of liability, liens and mortgages, registration of rights in vessels under construction, and oil pollution where in each case the State party is also a party to the relevant existing Convention. This draft Convention has not yet been submit­ ted to a diplomatic conference of States, let alone opened for signature. If ‘ship’ is not defined in the proposed legislation the position will be uncertain. Those rigs which work without being anchored to the sea-bed would probably be held to be ships.22 However submersibles, semi-submersibles and jack-up rigs would possibly not be regarded as

17. One difficulty is in determining when a seaplane ceases to be a ‘ship· and becomes an ‘aircraft': eg at which point is its take-off. Demarcation difficulties of this kind reinforce the conclusion that seaplanes should be excluded.

18. While hovercraft are generally treated as sui generis under English law (Hovercraft Act 1968 (UK) s 4(3)), they are treated as ships for the purposes of maritime liens (s 2(2)) and for the purposes of the admiralty jurisdiction set out in the Supreme Court Act 1981 (UK) s 20-4 (s 2(1)). cf Admiralty Jurisdiction Regula­ tion Act 1983 (S Af) s l(l)(v) (‘ship includes any ... hovercraft"). As might be expected from its date, the

1952 Arrest Convention does not refer to hovercraft. The Convention does not contain any definition of ship. The definition in Federal Court Act 1970 (Can) s 2 of ‘ship" makes no direct reference to hovercraft: ‘ship’ includes ‘any description of vessel or boat used or designed for use in navigation without regard to method or lack of propulsion’. 19. Other Commonwealth legislation in which hovercraft are treated as ‘ships’ or ‘vessels’ include the Antarc­

tic Marine Living Resources Conservation Act 1981 (Cth), Crimes at Sea Act 1979 (Cth), Great Barrier Reef Marine Park Act 1975 (Cth), Historic Shipwrecks Act 1976 (Cth), s 14, 16, 23, 25, 28, Shipping Reg­ istration Act 1981 (Cth), Whale Protection Act 1980 (Cth). Commonwealth legislation which excludes ho­ vercraft from the definition of ‘vessel’ includes the Antarctic Treaty (Environment Protection) Act 1980 (Cth) and Bounty (Ships) Act 1980 (Cth). 20. See para 115. 21. The text is reprinted as Appendix D to WW Spicer, ‘Some Admiralty Law Issues in Offshore Oil and Gas

Development’ (1982) 20 Alberta L Rev 153. 22. M Summerskill, Oil Rigs: Law and Insurance. Stevens, London, 1979, 84-5. In the absence of decisions precisely in point this work relies on exhaustive analysis of the general English case law on the definition of ‘ship’. Australian courts would presumably be guided by the same cases, there being no Australian

cases of direct relevance.

The Subject o f the Action In Rem / 73

ships.23 Alternatively, the line might be drawn so as to exclude submersible and jack-up rigs on the basis that these two types of rig can only perform their main function while resting on the sea-bed.24 But much might turn on the extent to which a court was pre­ pared to be guided by the definition of ‘ship’ in the Navigation Act 1912 (Cth) s 6(1). This

defines a ‘ship’ (for the purposes of some parts of the Act) to include ‘an off-shore indus­ try mobile unit’.25 This expression is in turn defined in s 8(3) as including ‘a structure (not being a vessel) that is able to float or be floated [and] is able to move or be moved as an

entity ...’ and which contains drilling equipment as part of its structure. For other parts of the Act an off-shore industry mobile unit is given a more restricted definition, which ex­ cludes units that are not self-propelled.26 But the broader definition applies to those parts of the Act where the overlap with traditional admiralty jurisdiction is greatest, that is, col­

lision, salvage and wreck. The broader definition also applies to other provisions of con­ cern to this Reference, such as powers to detain foreign ships which have caused damage and to order the sale of ships to meet unpaid liabilities of the master or owner under the Act.27

103. The Options. Given this background one option would be to simply use ‘ship’ with­ out providing any definition directed at oil rigs.28 While this would probably allow the most mobile types of rig to be the subject of an action in rem 29 it would be unlikely to al­ low the arrest of a jack-up rig. Yet even the latter can raise its legs and sail out of the jur­ isdiction leaving those with claims against it to pursue its (almost invariably foreign) owner in personam. A second option would be to define all types of mobile off-shore rig as ‘ships’ for the purposes of admiralty jurisdiction. This would allow, for example, claims for necessaries to be pursued in rem. But it would also allow an action in rem for

claims for damage done by a ship, including, for example, a blowout during drilling causing oil pollution.30 While this might seem appropriate, only self-propelled off-shore industry mobile units are treated at present as ships for the purposes of limitation of lia-

23. id, 84. In its submission to the Senate Select Committee on Off-Shore Petroleum Resources, the Common­ wealth Department of Shipping and Transport stated: O il drilling rigs of the semi-submersible or jack-up type are not regarded as ships under British law, and therefore we consider the Navigation Act does not apply to them’. See the Committee's Report, AG PS, Canberra, 1971, para 19.77. Note the dictum of

Thurlow CJ in Re Seafarers' International Union o f Canada and Crosbie Offshore Services Ltd (1982) 135 DLR (3d) 485, 495 that the rigs in question, self-propelled rigs capable of operating in either submersible or semi-submersible mode, were ships. 24. Summerskill (1979) 85. Spicer (1982) 153, on the basis of a survey of English and Canadian cases, con­

cludes ‘with the possible exception of jack-ups, that offshore rigs are ships’. He also however observes: O il rigs are a relatively new phenomenon in Admiralty Law. There are very few questions to which there are certain, or any, answers’: ibid. See also WW Spicer, ‘Canadian Maritime Law and the Offshore: A Pri­ mer’ (1984) 15 JM LC 489, 502-4. 25. See para 99. 26. The mode of propulsion is independent of the type of rig: while all drill ships are self-propelled (cf drill

barges), some semi-submersibles and jack-ups are self-propelled, others are not. 27. Navigation Act 1912 (Cth) s 383, 399. 28. The Beattie Report recommended this option for New Zealand (Special Law Reform Committee (Chair­

man: Beattie J), Admiralty Jurisdiction. Wellington, 1972, para 9), and it was in fact adopted: Admiralty Act 1973 (NZ) s 2 (‘“ship” includes any description of vessel used in navigation'). 29. Provided, of course, that they can be duly served and arrested. See para 111-5 on the geographical ambit of admiralty jurisdiction, in particular whether it would allow service and arrest in Australia's exclusive

economic zone. 30. cf Spicer (1982) 163-4. For the scope of the various heads of jurisdiction for damage done in the oper­ ation etc of ships see para 165-7, 172, 179-84.

74 / Civil Admiralty Jurisdiction

bility actions.31 Thus the jack-up rig owner would have the burden of his rig being subject to an action in rem without the normally corresponding benefit of being able to limit lia­ bility. Even if the limitation regime is extended to rigs which are platforms rather than ship-like hulls, the measurement of tonnage for limitation purposes is not free from diffi­ culty.32 There may also be difficulties in trying to treat as a ship a rig which is engaged in drilling (as opposed to being moved from one place to another). For example, what would arrest mean: that the rig could not be moved or could not be worked? Those work­ ing on the drilling operation would presumably be regarded as its ‘crew’ in the sense in which that term has been traditionally used of people who sign ship’s articles for a voy­ age.33 Another option would be to treat rigs of the jack-up, submersible and semi- submersible types as ships only while not on their drilling station. But this would create undesirable boundary problems: ‘such a drilling unit would be an indeterminate animal, subject to laws of limitation, salvage and the like at some times and not at others’.34 It would also mean that claims which arose while it was drilling could not be pursued in rem. Another variation might be to allow claims to accrue against the rig while drilling but allow arrest only when the rig is mobile. But this does not eliminate the difficulties in determining how admiralty concepts like ‘damage done by a ship’ and the like apply to drilling operations so as to give rise to admiralty claims. Yet another approach would be to define ‘ship’ differently for the purposes of different heads of admiralty jurisdiction. There is a precedent for this in the varying definitions used in the Navigation Act 1912 (Cth). Supply of goods and materials to an oil rig could be brought within admiralty while leaving out, say, damage done by a ship. But this would introduce further compli­ cations and does not appear desirable. It is not clear upon what basis the types of claims which could be brought in admiralty would be distinguished from those which could not.

104. Conclusion on Rigs. The arguments for and against including mobile rigs in admir­ alty are fairly finely balanced. What can be said is that it is desirable to make the matter clear rather than leave it to be resolved on a case-by-case application of the definition of ‘ship’. Clearly there are many purposes (for example wages, goods supplied) for which rigs should be assimilated to ships. That rigs may not be able to limit their liability under the various limitation conventions is a matter to be dealt with under those conventions, and is not as such a reason for excluding them from admiralty.35 Many mobile rigs would be classed as ‘ships’ for admiralty purposes, and for the sake of clarity and certainty it is better to extend the class to cover all such rigs. This view was generally supported in sub-

31. Navigation Act 1912 (Cth) s 6(1) (‘ship’) with reference to Pt VIII. This is presumably because the view was taken that only self-propelled rigs were ‘sea-going ships’ for the purposes of the 1957 Limitation of Liability Convention, the text of which is reproduced in Sch 6 to the Act and upon which Pt VIII relies. The limitation provisions of the Protection of the Sea (Civil Liability) Act 1981 (Cth) would seldom be relevant because they apply only to ‘any seaborne craft of any type whatsoever, actually carrying oil in bulk as cargo’: Sch 1, art 1(1). 32. cf the CMI Draft International Convention on Off-Shore Mobile Craft, 1977, art 9 which attempted to

deal with this difficulty by providing that ‘for the purposes of calculating the limit of liability ... craft which are platforms shall be deemed to be not of less than X tons’. No value was assigned to ‘X’. 33. See eg Offshore Company v Robison 266 F 2d 769 (1959) on the question whether a labourer on a jack-up rig is a seaman. The Navigation Amendment Act 1980 (Cth) s 18 (not yet in force) provides that those

who work on off-shore industry mobile units are eligible to sign a ‘contract of sea-service’ and to recover under the Navigation Act provisions dealing with seamen’s wages. The Navigation Amendment Act 1981 (Cth) s 7 alters the definition of ‘ship’ for the purposes of wages in the principal Act so that it ‘does not include a barge, lighter or other floating vessel that is not self-propelled’. The effect, if any, of these pro­ visions on the admiralty definition of seaman is unclear. 34. Summerskill (1979) 85. 35. See para 103 n 31. Not all ships within admiralty jurisdiction at present are entitled to limit liability:

Kirmani v Captain Cook Cruises Pty Ltd (1985) 58 ALR 29.

The Subject o f the Action In Rem / 75

missions and in other views expressed to the Commission.36 3 7 Accordingly the definition of ‘ship’ should specifically include off-shore industry mobile units as defined in the Naviga­ tion Act 1912 (Cth)s 8(3). 105. Pleasure Craft. In the United States considerable litigation has been devoted to es­

tablishing if tort actions arising out of the use of pleasure boats can properly be brought in admiralty.31 In 1982 the Supreme Court held by a 5:4 majority that they can.38 The is­ sue has not arisen in other countries such as the United Kingdom or New Zealand per­ haps because, unlike the United States39, the rules applied in those countries are much the

same whether the action is brought in admiralty or in the general courts.40 Attempting to distinguish pleasure craft from other types of craft for the purposes of admiralty would be both difficult41 and undesirable. Especially these days, ‘pleasure craft’ can be large and expensive, fully capable of international navigation. Nothing in the proposed definition

should exclude such craft. 106. Inland Waterways Vessels. To attempt to extend admiralty jurisdiction to inland waterways vessels seems unnecessary, and may raise constitutional difficulties.42 A con­ venient way of achieving this result is to exclude such vessels from the definition of ‘ship’. The Navigation Act 1912 (Cth) s 6 defines an ‘inland waterways vessel’ as a ship used

‘wholly in waters other than the waters of the sea’. The same section defines ‘sea’ as in­ cluding ‘any waters within the ebb and flow of the tide’. This language would exclude from admiralty jurisdiction all claims against or in respect of such vessels. It would also exclude this type of vessel from the category of res which may be arrested. It is recog­ nised that there will be some marginal uncertainty about the definition of ‘inland water­ ways vessel’. For example, claims might arise in respect of a boat sold (or hired) on a trailer and delivered to the customer on land. Establishing the waters upon which it was

36. In ALRC Admiralty Research Paper 1 (S Curran & D Cremean), An Australian Admiralty Act: The Ambit o f Admiralty Jurisdiction. 1984, 115 the tentative view was taken that mobile rigs should be neither specifi­ cally included nor specifically excluded. However the predominant view expressed to the Commission since then has supported the conclusion in the text. See eg PG Willis, Deputy Corporate Solicitor, BHP,

Submission 68 (15 November 1985) 1. The same view was taken in the Zelling Report: Law Council of Australia and Maritime Law Association of Australia and New Zealand, Joint Committee, (Chairman: Justice HE Zelling) Admiralty Jurisdiction in Australia. 1982, 56. 37. See eg P Stolz, ‘Pleasure Boating and Admiralty: Erie at Sea' (1963) 51 Cal L Rev 661; PD Carmilla and

MP Drzal, ' Foremost Insurance Co v Richardson : If This is Water it must be Admiralty' (1983) 59 Wash L Rev I. 38. Foremost Insurance Co v Richardson 457 US 668 (1982). For comment see eg NJ Healy, 'United States Admiralty and Shipping Law — Recent Developments' (1984] LMCLQ 607,607-10. 39. Stolz (1963) 662-63 gives as examples of differences between admiralty and ordinary courts the rules as to

contributory negligence, contribution between tortfeasors, standards of care owed to visitors on board, and limitations of actions. The absence of any jury in admiralty and differing rules as to interspousal im­ munity are other factors. The most contentious point is that because the power to legislate is congruent with admiralty jurisdiction (see para 68), the extension of admiralty jurisdiction into what are argued to

be local matters (ie small boats in non-commercial use) entails the intrusion of federal legislative power into the subject: see Stolz (1963) 664-65. 40. cf Edwards v Quickenden and Forester [1939] P 261, a case arising out of a collision between a racing eight and another rowing boat in which the rules at the time as to contributory negligence were different in ad­

miralty compared to the common law. The court held (on dubious grounds) that neither rowing craft was a 'vessel' and hence that admiralty rules did not apply. For criticism see Thomas and Steel (1976) para 681. Note also the forum shopping in Union Steamship Co o f New Zealand v The Ship Caradale' (1937) 56CLR 277. 41. In Foremost Insurance Co v Richardson 457 US 668 (1982) the majority regarded such a distinction as dif­

ficult, referring to pleasure boats used on hire or used occasionally for business purposes. The minority however, felt that the distinction 'rarely would present a difficult problem for any court" (id, 683, n 7). Contrast Mavor o f Southport v Morriss [1893] 1 QB 359 and Weeks v Ross [1913] 2 KB 229. 42. There is a long-standing common law objection to the exercise of admiralty jurisdiction over 'internal' matters: see para 10. The Acts of Richard 11 may not delimit the scope of s 76(iii) of the Constitution (see para 67, 70) but extending admiralty to local matters arising on internal waters might be held to go too far.

76 / Civil Admiralty Jurisdiction

used (or intended to be used) might be difficult. But such difficulties are marginal and can be left to the courts.43 107. Equipment, Furniture, Stores, Bunkers. The definition of ‘ship’ for the purposes of arrest in rem traditionally extends to include the ship’s tackle, apparel and furniture.44 4 5 In

The Silia45, Justice Sheen was faced with the argument that the ship’s bunkers were not part of the ship. He said:

What I have to decide is whether the word ‘ship’ in s 3 has a limited meaning, and means no more than the hull, machinery and spare parts, or whether ‘ship’ has a wider meaning and means the hull, machinery and everything on board which is the property of her owners ... I have no doubt that in the context of an action in rem the word ‘ship’ includes all property aboard the ship other than that which is owned by someone other than the owner of the ship.46

He went on to ask rhetorically why ‘any property of the shipowner which is on board for the prosecution of the maritime adventure should be exempt from arrest and not made available to pay the creditors’.47 The decision does not address the issue whether property aboard the ship is included when it is owned by someone other than the ship’s owner, but that other person would have been liable had the action been brought in personam. Al­ though difficult questions may arise, particularly between owners and charterers, as to who owns a particular item of stores or bunkers48, the principle as expounded by Justice Sheen is sufficiently clear. Accordingly it is unnecessary to define this aspect of ‘ship’ in the proposed legislation.49

108. Ships Under Construction. A further question is whether the proposed definition of ‘ship’ should attempt to define when a vessel under construction becomes a ‘ship’ for ad­ miralty purposes. Although the maxim ‘a ship is born when it is launched’ is sometimes encountered50, the position is by no means clear. Most of the relevant cases turn on the definition of ‘ship’ for a purpose other than admiralty.51 5 2 In one unreported decision in

New South Wales a yacht which had been launched and moved under its auxiliary motor but had not been fully fitted out was held not to be a ‘ship’ within the meaning of the Ad­ miralty Courts Acts of 1840 and 1861.52 The Court took the view that the definition in s 2 of the 1861 Act ‘... vessel used in navigation ...’ required ‘a use of a vessel in its character as a ship in navigation and not merely its motivation under power’. This would seem to

43. See para 115 for proposed restrictions on the exercise of admiralty jurisdiction where the claim arises on inland waters. 44. McGuffie (1964, 1975) para 69. 45. [1981] 2 Lloyd's Rep 534. 46. id, 537. Justice Sheen noted that in English admiralty practice the sale of bunkers is kept distinct for ac­

counting purposes from the sale of the vessel but commented that no ultimate significance should be at­ tached to the Court’s internal bookkeeping procedures. This judgment contains a useful statement of Reg­ istry practice on the sale of a ship with respect to food, stores, fuel, barometers and instruments etc. 47. ibid. 48. See eg The Span Terra (No 2) [1983] 1 Lloyd’s Rep 441 (CA), [1984] I WLR 27 (HL); Frosso Shipping Cor­

poration t> Richmond Maritime Corporation 1985 (2) SAfLR 476 (not an admiralty case). 49. Of relevant overseas legislation, the only Act to do so is Admiralty Jurisdiction Regulation Act 1983 (S Af) s 3(5)(a) (action in rem instituted by arrest o f ‘the ship, with or without its equipment, furniture, stores or bunkers’), cf the definition in the Navigation Act 1912 (Cth) s 6 of ‘equipment’ for the purposes of the

Act (including salvage) as including 'every thing or article belonging to or to be used in connection with, or necessary for the navigation and safety of, the ship and, in particular includes ... '. There follows a list of some 28 items. 50. See Benedict on Admiralty, 7th edn, MM Cohen ed, Matthew Bender, NY, 1983, para 163 for reference to United States and some 19th century English authorities. 51. See Thomas and Steel (1976) para 684 for references to cases involving the Merchant Shipping Acts and other legislation. 52. Lovett Bay Holdings Pty Ltd v The Cognac, unreported, NSW Supreme Court, 18 November 1981 (Fisher J) noted in (1981) 4(1) M LA A N Z Newsletter 10-11 from which the account in the text is taken. Before fit­ ting out was complete a dispute arose between the owner and the boatyard, the owner removed the yacht from the yard and the boatyard then had the yacht arrested for the balance of the monies outstanding.

The Subject o f the Action In Rem / 77

suggest that the end of the fitting out period, rather than the moment of launch, is when a ship is born.53 But the result does not seem desirable. A person with claims against the vessel in respect of goods supplied, or damage done during or shortly after launching,

should not be expected to wait until the indeterminate time when fitting out is sufficiently complete before commencing proceedings. The moment of launch is the most appropri­ ate time, for it is then that the ship becomes mobile and arrest in admiralty becomes par­ ticularly useful. It is true that, until a ship is complete its tonnage cannot be measured, that it cannot therefore generally be registered54 and that (at least arguably) its owner cannot apply to limit liability.55 But these factors should not be determining. According­ ly, the definition of ‘ship’ should fix on the time of launch as the time when the vessel be­ comes a ‘ship’. It should also be made clear that a claim relating to the construction of a

ship before it was launched can be commenced against the ship after launching.56

Cargo, Freight and Other Types of Res

109. Need to Specify Cargo and Freight? Typically actions in rem are brought against ships. The 1952 Arrest Convention addresses only such actions. But English admiralty law has long recognised other types of res. Yet the recent United Kingdom legislation on admiralty jurisdiction makes no reference to what these other things are. References to

arrest of ships ‘and other property’57 make it clear that ships are not the only type of thing which may be arrested, but beyond that the legislation is silent. The Rules of the Supreme Court indicate that in addition to a ship, the res may consist of cargo, freight or the fund in the possession of the court representing the proceeds of the sale of the res.58 The position in New Zealand and Canada is similar. This approach provides one model

which Australia might follow. In contrast, South African legislation explicitly provides for the arrest of the following categories against or in respect of which the claim lies:

(c) the whole or any part of the cargo; (d) the freight.59

Two further additions might be made to such a provision. First, the terms ‘cargo’ and ‘freight’ might be defined. ‘Cargo’ simply refers to any goods carried by sea. The main area of difficulty is when, in the course of transit, goods become identifiable as ‘cargo’ and when, at the receiving end, they cease to be ‘cargo’.60 The term ‘freight’, as used in

the law of carriage by sea, refers to the ‘remuneration for the carriage of goods in a

53. cf The Andalusian (1878) 3 PD 182. A hull launched into the Mersey river collided with a passing ship. The engines, masts and sails had not yet been installed in the hull. Sir Robert Phillimore was disposed to consider that a ship of this character, in the imperfect state of a launch, might be included' in the defini­ tion o f ‘ship’ in the Merchant Shipping Act 1854 (UK) s 2 (which is identical to the definition in the Ad­

miralty Court Act 1861 (UK) s 2). 54. Shipping Registration Act 1981 (Cth) s 16. 55. Limitation operates on a formula which involves the tonnage of the ship. In The Andalusian (1878) 3 PD 182 (see n 53) Sir Robert Phillimore held that, as the unfinished hull was incapable of being regis­

tered, its owner could not limit liability, which at that time could only be done in respect of registered ships. 56. For claims with respect to ship construction see para 170. 57. Supreme Court Act 1981 (UK) s 21(2), 21(3), 21(6). 58. RSC (UK) O 75, r 8(1); O 75, r 11. 59. Admiralty Jurisdiction Regulation Act 1983 (S Af) s 3(5). 50. See eg National Dock Labour Board v John Bland

miralty purposes) when a ‘cargo’ ceases to be identifiable as such.

78 / Civil Admiralty Jurisdiction

ship’.61 In the context of marine insurance it has a wider meaning, including both ‘the price agreed to be paid by the charterer to the shipowner for the hire of his ship, and also the benefit which the shipowner expects to derive from the carriage of his own goods in his own ship, in the shape of their increased value to him at the point of delivery’.62 Al­ though judicial discussion of the meaning of ‘freight’ for the purposes of arrest in rem is extremely sparse and modern authority seems to be non-existent, it would appear that the wider definition is the appropriate one.63 If the absence of modern cases can be taken as a guide, difficulties seldom arise with the definition of ‘freight’ or ‘cargo’. No definition is necessary on this point. A second issue involves the question of the kinds of claim that can be brought against different kinds of property. McGuffie states the English position as follows:

Res against which an action in rem may be brought include: (a) In all cases: a ship, that is to say any description of vessel used in navigation, and all her equipment and wreck of the ship or equipment, including flotsam, jetsam, lagan and dere­ lict.

(b) In salvage, in claims by shipowners for unpaid freight, in bottomry, in forfeiture and in condemnation: the cargo in a ship, or cargo landed from a ship and still identifiable as cargo and not delivered to consignees.

(c) In salvage, collisions, and bottomry: freight at risk, viz., the money payable, and not yet paid, for carrying cargo in a ship and also, in salvage alone, passenger fares at risk.

(d) -(e) In all cases: the proceeds of sale by the court of any of the foregoing property except freight and passage money.

(f) In cases under the Slave Trade Act, 1873, and similar Acts: slaves, goods and effects with­ in the provisions of the Acts.64 Where the right to proceed in rem has been conferred by statute, what constitutes a res for that purpose should, in theory at least, be determined by reference to the statute. In prac­ tice the statute is generally silent on the point. For example, general average was added to the kinds of action which could be pursued in rem in England in 1956, but no refer­

ence was made to what property could constitute the res.65 Before 1956 the shipowner had a possessory lien at common law on cargo for contributions in respect of general av­ erage. It is not clear that the ability to proceed in rem has added anything. The possessory lien would be lost once possession was surrendered, but it could also be argued that the goods carried ceased to be ‘cargo’ once they had been delivered up from the ship. A simi­ lar argument could be made in respect of claims against cargo under the head of admir­ alty jurisdiction relating to ‘agreement relating to the carriage of goods in a ship’: the shipowner’s common law possessory lien for freight together with other express liens66 in the charterparty or bill of lading normally render in rem proceedings superfluous, and

61. Carver's Carriage by Sea. 13th edn, R Colinvaux ed, Stevens, London, 1982, para 1661. See The Zigurds [1932] P 113 for an example of an admiralty action concerning freight in which the freight was worth con­ siderably more than the ship itself. 62. Arnould’s Law o f Marine Insurance and Average. 16th edn, MJ Mustill & JCB Gilman eds, Stevens, Lon­

don, 1981, para 3 11; cf Marine Insurance Act 1909 (Cth) s 3. 63. See The Andalina (1886) 12 PD 1 where a ship belonging to A had been chartered by B for a round voy­ age. B had later sub-chartered the ship to C for the homeward leg of the voyage. In an action by the crew for wages it was held that they had a lien on all the freight outstanding on the voyage, including that pay­

able by C to B. C’s cargo could be arrested to enforce the lien. 64. McGuffie (1964, 1975) para 69 (footnotes and references to aircraft and hovercraft have been omitted). Thomas adds to this list the possibility of arresting freight on the maritime liens for master’s and seaman's wages and master’s disbursements: Thomas (1980) para 37. 65. Administration of Justice Act 1956 (UK) s l(l)(q). 66. See Carver's Carriage by Sea (1982) para 1991-2039 on the shipowner’s liens at common law and under

contract.

The Subject o f the Action In Rem / 79

where these liens are lost by yielding possession their subject matter at the same time ceases to be ‘cargo’. Under the South African provision quoted earlier it is not clear whether a right to arrest cargo is being conferred, or merely a facility to pursue a remedy, the source of which must be found elsewhere.67 The position under the English legislation

is also not clear.68 The difficulty in trying to clarify the question what may be arrested in respect of which claim is the risk of erroneously restating the law. It is doubtful whether such a restatement is necessary. With respect to maritime liens on freight and cargo the position is reasonably clear.69 Restatement for the purposes of clarification does not seem

to be a pressing need. There seems virtually no occasion to arrest cargo apart from on a maritime lien because in most cases the potential plaintiff has a possessory lien.70 The fact that the way in which such a lien relates to arrest in admiralty is not altogether clear will seldom, if ever, cause concern. If the rationale for arresting freight is that it is an incident

of the ship or part of the maritime adventure71 there seems to be no reason why, when the ship itself is insufficient to meet the claim72, the pending freight should not be arrested. As already mentioned, problems associated with the arrest of freight appear to be very rare. Where freight has been prepaid73 or will not be earned until the voyage is complete74 there can be no freight outstanding against which to proceed. Equally, if there is no cargo present which can be arrested to secure payment of freight, the question of proceeding in

rem against the freight cannot arise.75

110. Conclusion. Apart from the rarity with which these issues are likely to arise, there could also be difficulties with property owned by a person who is not the shipowner, but who may be liable in respect of the claim. On balance, it is undesirable to spell out what would be a complex definition, one which will rarely be needed but which would not necessarily resolve the difficult problems that could arise. Accordingly it should be suf-67. The problem of the elusive dividing line between substance and procedure has already been referred to:

see para 80. On the complex history of the master's lien on cargo for payment of freight, see Wiswall (1970) 10; Gilmore & Black (1975) 187. 68. In The Eschersheim [1976] 1 All ER 920 no question of arresting other than a ship was at issue. But Lord Diplock’s analysis (id, 927-9) of the Administration of Justice Act 1956 (UK) s 3(4) and s 1(1 )(d)— (r) can

be read as suggesting that only a ship may be arrested under heads (d)-(r). Similarly it is possible to read the Supreme Court Act 1981 (UK) s 21(3) as allowing the arrest o f ‘other property’ in respect of maritime liens, but only ships under s 21(4) (which operates by reference to s 20(2)(e)-(s)). But s 21(4) can also be read (and it is perhaps the better reading) as dealing only with the question of when a ship may be ar­

rested and as not addressing the question of arrest of ‘other property' at all. 69. See eg Carver’s Carnage by Sea (1982) para 1747 for the rules on maritime liens on freight. See also Thomas (1980) para 226, 281-2, 318, 359. For one situation that may require reform see The Castlegale [1893] AC 38, 55 (Lord Watson). This involved arrest of cargo or freight in respect of a charterer's liabili­

ties, an issue discussed in general terms in chapter 8. 70. See eg The Gina [1980] 1 Lloyd’s Rep 398 for an illustration of the way in which a shipowner with a claim against cargo can simply hold on to the cargo and thereby force the cargo owner to sue as plaintiff (in this case by arresting the ship).

71. There does not appear to be any clear judicial statement on why freight should be arrested. In The Or­ pheus (1871) LR 3 A & E 308, 312, Sir Robert Phillimore justified admiralty jurisdiction to arrest freight as stemming ‘from the reason of the thing’ and from long usage. 72. It is not clear whether freight can only be arrested where the value of the arrested ship is inadequate to

meet the outstanding claim. In The Mary Ann (1845) 9 Jur 94, dicta of Dr Lushington suggest that freight can be arrested even where the claim is not greater than the value of the ship alone. See also The Andalina (1886) 12 PD 1. In practice the point often becomes overlaid by doctrines of marshalling. The commercial reality seems to be that the extra costs of arresting freight are not incurred unless the arrest of the ship alone will prove inadequate. 73. Where freight has already been collected and paid into a bank it ceases to be a res : The Kaleten (1914) 30

TLR 572.

74. The Flora ( 1866) LR 1 A & E 45. 75. The Kaleten (1914) 30 TLR 572: But if a portion of the cargo could be reached then the whole of the freight could be arrested’, citing The Roectiff (1869) LR 2 A & E 363. In the latter case the entire cargo be­ longed to a single owner. It would not appear that cargo belonging to one owner can be arrested to se­

cure payment of freight by another.

80 / Civil Admiralty Jurisdiction

ficient to refer to a right to proceed in rem against a ship or other property. However the practice of commencing proceedings against the proceeds in court of the sale of a ship76 is a valuable one, and should be specifically provided for.

The Geographical Scope of Admiralty

111. Introduction. In drafting legislation based primarily on the power to confer ‘admir­ alty and maritime jurisdiction’, questions of the geographical scope of the jurisdiction arise. These do not concern the question of any nexus between the forum and the cause of action: it is well established that admiralty jurisdiction in rem is universal. However there are questions about where service of process in an action in rem needs to be effected

for jurisdiction to be attracted77, and where arrest of the res can properly be carried out. There are also questions about the extension of admiralty jurisdiction to claims arising ‘internally’ within Australia (that is, on internal waters).

112. Service and Arrest o f Ships in Motion. Service on and the arrest of a ship is normal­ ly effected while the ship is alongside a wharf or at anchor in a port. The question whether a ship may be arrested while in motion or while stopped but not at anchor (for example, to pick up or drop a pilot) has only rarely arisen. There are two aspects to the question. The first is whether the rules of court would allow such arrest. This in turn largely depends on whether an arrest can, as a matter of fact, be made effective without resorting to the use of force.78 It is suggested that the question of what constitutes an ef­ fective arrest should be left to courts to resolve on the particular facts if a case arises. The proposed legislation (and rules of court) should not explicitly prohibit arrest of a moving vessel, but should simply leave the point open.79

113. Service and Arrest in the Territorial Sea. The second aspect of the question of arres­ ting ships outside ports is where the ship must be in order to fulfil the requirement for a valid arrest that the res must be ‘so situated as to be within the lawful control of the state under the authority of which the court sits’.80 It is a question of international law how far

76. See McGuffie (1964, 1975) para 211,217, 251. 77. Jackson (1985) 83, 85. 78. See Borjesson and Wright v Carlberg (1878) 3 App Cas 1316, 1320 for the observations of Lord Cairns (with whom Lord Hatherley agreed) on the practice of Scottish courts in allowing arrestment ad

fundandam jurisdictionem. He noted that some of the judges in the court below doubted whether the ship could be even served with arrestment after she had ... commenced her voy­ age and was in motion; but, be that as it may, it appears to me that the very utmost that could be done would be that those who thus got on board of her might affect the master, whatever might be the con­ sequence of it, with the knowledge that an arrestment was there and was served there on board the ship. But 1 can find no authority whatever which would justify them in turning the ship about and bringing her back into port. See also Dunbar v The Milwaukee (1907) 11 Ex CR 179 (admiralty arrest effective where sheriff allowed on board moving ship and master agreed to follow sheriffs instructions and proceed to anchorage); The Rhenania, The Times, 12 November 1909 (ship in transit through English Channel after leaving English port, hailed by admiralty officer from tug, stopped, allowed officer to board, warrant of arrest read and fixed to the mast. Master asserted that he could not be properly arrested in that position, nearly 2 miles off English coast, and sailed off. On subsequent return to England, fined 100 pounds for contempt of court for ‘breaking arrest’), cf The Largo Law (1920) 15 Asp MLC 104, 105, where Hill J questioned whether an effective arrest could be made even of a ship anchored in an open roadstead, though he was prepared to assume that it could. 79. In ALRC Admiralty Research Paper 3 (V Thompson & S Curran), Draft Legislation: Admiralty Procedure

and Rules, 1985, a provision was proposed in draft rules defining when it is contempt of court to move a ship so as to prevent arrest. After discussion it was agreed that the matter is best left to the general law: cf The Seraglio (1885) 10 PD 120. 80. Castrique v Imrie (1870) LR 4 HL 414, 429 (Blackburn J) cited with approval in Aichhorn & Co KG v The

Ship M V Ta/ti6of(1974) 48 A U R 403, 404 (Menzies, Gibbs and Mason JJ).

The Subject o f the Action In Rem / 81

off-shore and under what circumstances Australia may assert jurisdiction over foreign ships. There is a further question whether the particular Australian court is empowered by Australian law to assert jurisdiction in ways which are internationally permitted. This latter question is presently addressed by s 380(1) of the Navigation Act 1912 (Cth). This

provides:

Where any district within which any Court has jurisdiction is situate on the sea coast, or abuts on or projects onto any navigable water, the Court shall have jurisdiction over any ship being on or lying or passing off that coast, or being in or near that navigable water, and over all per­ sons thereon or belonging thereto, in the same manner as if the ship or persons where within the limits if the original jurisdiction of the Court.81

The international law constraints on arrest of foreign ships in the territorial sea are set out in art 20(2)— (3) of the 1958 Territorial Sea Convention82, which provide:

2. The coastal State may not levy execution against or arrest the ship for the purpose of any civil proceedings, save only in respect of obligations or liabilities assumed or incurred by the ship itself in the course or for the purpose of its voyage through the waters of the coastal State.

3. The provisions of the previous paragraph are without prejudice to the right of the coastal State, in accordance with its laws, to levy execution against or to arrest, for the purpose of any civil proceedings, a foreign ship lying in the territorial sea, or passing through the territorial sea after leaving internal waters.

Australia is a party to this Convention. In practice attempts to serve or arrest foreign ships on continuous passage have been very rare.83 In areas beyond the territorial sea international law would not permit any general assertion of civil jurisdiction in the form of arrest of foreign vessels. While the coastal state has the right to make and enforce laws for the management and exploitation of the exclusive economic zone and the continental shelf84, this right would not allow arrest in admiralty on an ordinary civil claim. Neither

would it appear to allow arrest even where the claim is directly related to an activity in­ volving exploitation of the resources of the zone or shelf, though there may be room for argument on the point. Even if off-shore oil drilling rigs are defined as ‘ships’ for the pur­ poses of the proposed legislation, they would not appear to be subject to admiralty arrest while moving or while drilling outside territorial waters.

81. Contrast the position in the United States where admiralty courts lack the power to order arrests in the territorial sea as a matter of municipal law: The Hungaria (1889) 41 F 109. Hence as a matter of munici­ pal law an oil drilling rig off-shore is outside admiralty jurisdiction and cannot be arrested in rem : ITT Industrial Credit Co v Phoenix Sea Drill Big Foot IT [1984] AMC 503 (DC WD La). 82. Convention on the Territorial Sea and Contiguous Zone, Geneva, 29 April 1958, 516 UNTS 205 (see also

for text, Sch 1 of the Seas and Submerged Lands Act 1973 (Cth)). Art 28(2)-(3) of the Law of the Sea Convention, Montego Bay, 10 December 1982, UN Doc NoAZConf.62/122, is to identical effect. Al­ though the wording of the 1952 Arrest Convention is capable of being read as allowing arrest of foreign ships transiting the territorial sea on any ‘maritime claim" as defined in that Convention, the better view is that the 1952 Arrest Convention was not intended to address the issue and that the 1958 Convention rep­

resents the international law rule: see the summary of the extensive discussions within the International Law Commission in YBILC 1956/11, 275-6. 83. In 1958 Sir Gerald Fitzmaurice of the United Kingdom said that there had never been such an arrest: UN Conference on the Law o f the Sea (Geneva, 27 Feb— 27 April 1958) Official Records, vol 3, 124 (UN Doc

No A/Conf. 13/69). But for an example see The Ship DC Whitney' v St Clair Navigation Co (1907) 38 SCR 303 in which the Canadian Supreme Court held that there was no right to arrest in admiralty a for­ eign ship on innocent passage through Canadian waters on a claim which had no connection with Canada beyond the presence of the res. It was assumed but never proven that the ship was in motion at the time of arrest (id, 324). But note that s 383(1) of the Navigation Act 1912 (Cth), when read with the definition of 'Australia' in s I5B of the Acts Interpretation Act 1901 (Cth), allows ships on innocent pas­ sage to be detained by an Australian court on civil claims which need not have any connection with Aus­ tralia. Such a detention would seem to be a clear breach of Australia’s obligations as a party to the 1958 Territorial Sea Convention, art 20(2). 84. 1982 Law of the Sea Convention, art 73, 8 1.

82 / Civil Admiralty Jurisdiction

114. Conclusion. Australian admiralty jurisdiction should be extended to allow service and arrest in the territorial sea, subject to the limitation in favour of ships in innocent passage provided for in art 20(2) of the 1958 Convention. However it is far from clear that s 380(1) of the Navigation Act 1912 (Cth) extends to the whole territorial sea. The term 'ship being on or lying or passing off that coast’ in s 380 (I) might well be held to re­ fer to ships which are adjacent or even close to the coast85, and it is doubtful whether its meaning would expand to cover any future seaward extension of the Australian territo­ rial sea (say from the present three miles to 12 miles) that might be effected. Since s 380(1) applies to all jurisdictions of the specified courts, not just their admiralty jurisdiction, it should continue in force pending reconsideration as part of the overall reform of the Navigation Act 1912 (Cth). But a specific provision should be inserted in the proposed legislation making it clear that the admiralty jurisdiction of Australian courts extends to service and arrest of ships in the territorial sea, subject to the limits on arrest of ships in innocent passage under art 20(2) of the 1958 Convention. There should be no power to serve process on or arrest a ship outside the territorial sea in respect of claims relating to the continental shelf or exclusive economic zone. The matter may however need to be re­ considered later, when the question of the propriety of such extraterritorial service and arrest is better settled internationally.

115. Inland Waters Claims. Finally it needs to be considered whether there should be any limitation on admiralty jurisdiction with respect to claims relating to the use of a ship on inland waters. Even with the exclusion of inland waterways vessels recommended in para 106, the broad definition of 'ship' adopted would mean, in the absence of any fur­ ther limitation expressed in the legislation or implied through some constitutional restric­ tion in s 76(iii), that many inland waters claims would be included. A speedboat or yacht

used both at sea and on inland waters is not an inland waterways vessel86, and without such a restriction any maritime claim arising with respect to it on inland waters, would be within admiralty. It could be argued that this is desirable. The Admiralty Act 1973 (NZ) apparently applies to all New Zealand inland waters, and there is no indication that this has caused difficulties.87 The tendency has been for admiralty jurisdiction to be extended, for certain purposes at least, to inland waters in both the United States88 and England. In

The Goring89, for example, Justice Sheen held that a salvage claim arising on the Thames at Reading was within admiralty, on the basis that there was ‘no justification for an artifi- cal rule which would differentiate between services rendered to a ship in tidal waters and identical services rendered to a ship in non-tidal waters’.90 On the other hand the salvage provisions of the Navigation Act 1912 (Cth) only apply to the sea or ‘tidal water’.91 The general tenor of the views expressed to the Commission was that there was no need to ex­ tend admiralty jurisdiction to local Australian claims arising on inland waters. There is also doubt about the extent to which s 76(iii) would support such an extension.92 For these reasons it is recommended that the proposed legislation not apply where the cause

85. There are no reported cases on s 380. 86. See para 105-6. 87. The Admiralty Act 1973 (NZ) s 2 defines ‘New Zealand territorial waters’ to include all waters within New Zealand (‘and includes the waters of any lake, river or stream’), s 4(b) provides that the jurisdiction

extends to ‘all claims wheresoever arising’, s 6 limits certain admiralty claims to cases arising inter alia ‘within New Zealand territorial waters’, s 14 repeals the Acts of Richard II which excluded admiralty jur­ isdiction from matters arising within the body of a county (see para 9-10). 88. See para 105. 89. [1986] 2 WLR 219. 90. id, 223. 91. Navigation Act 1912 (Cth) s 315, 317; see also s 2. ‘Tidal water’ is defined in s 294 as ‘a part of the sea, or

a part of a river within the ebb and flow of the tide at ordinary spring tides, but does not include a har­ bour’. 92. See para 67, 70.

The Subject o f the Action In Rem / 83

of action arose in respect of the use or intended use of a ship exclusively on Australian inland waters unless the ship concerned is a foreign ship. Arrest of a foreign ship should be possible because it may sail away, never to return, after having been, for example, in­ volved in a collision on a navigable river upstream of tidal waters.

8. Maritime Liens and Statutory Rights of Action In R em

The Distinction Between Jurisdiction and Substantive Law

116. Introduction. The discussion in chapter 6 leads to the conclusion that Australian in­ terests are best served by a widening of admiralty jurisdiction, and that, while there are some international constraints, there is considerable scope for such an increase. So far as the subject matter of admiralty jurisdiction is concerned this conclusion is un-

controversial.1 This is not the case so far as the expansion of admiralty rights of arrest in respect of liabilities of charterers is concerned. Similarly, there is no consensus on the need to expand the present range of maritime liens (which, once created, ‘travel’ with the ship and rank over mortgages in priority). In addition to arguments about policy and

uniformity, there are constitutional factors and the Commission’s Terms of Reference to be considered. As pointed out in chapter 5, it is probable that the High Court would not interpret s 76(iii) of the Constitution as giving any distinct or substantive legislative pow­ er over maritime law, but as essentially a jurisdictional provision.2 On the other hand, the

distinction between substantive admiralty law and admiralty jurisdiction is very difficult to make with any clarity. In effect the whole history of admiralty has been one of altering substantive rights by decreasing, or, since the early 19th century, increasing, the jurisdic­ tion of admiralty courts. In a unitary system this presents no special difficulty, but if reli­

ance is to be had on a constitutional power which entails a distinction between ‘jurisdic­ tion’ and ‘substance’, the position may be different.

117. Scope of this Chapter. The underlying reason why distinctions between jurisdiction and substantive law, between remedies and rights, present special difficulties for the re­ form of admiralty is the problem of the relationship between what may be described as Ίη rem liability’ and ‘in personam liability’. The common law has focused almost exclu­ sively on the latter, but the principal focus of admiralty, since the 17th century at least,

has been the former. The amalgamation of the jurisdiction of admiralty and common law courts by the Judicature Acts has led to a tendency to assimilate the two.3 But the action in rem remains an accepted and distinct method of enforcing maritime claims. Moreover, especially when modern methods of ship operating and ship financing are taken into ac­ count, the action in rem inevitably tends to affect third parties. The legal owner of a ship may be a financier, with the ‘beneficial owner' a demise charterer.4 There may be a line of

1. For the subject matter of a reformed admiralty jurisdiction see ch 9. 2. See para 80. 3. See eg The Dictator [\$92] P 304. See further para 143. 4. A ‘demise charterer’ (often called a ‘bareboat charterer') is a person to whom the whole operation and

management of the ship has been delegated, who appoints the master and employs the crew: see L Gorton and others. Shipbroking and Chartering Practice. Lloyd's of London Press, London, 1980, 44.

86 / Civil Admiralty Jurisdiction

sub-charters of different kinds.5 One-ship* companies, holding companies and other cor­ porate devices are frequently involved. The use of open registries or ‘flags of conveni­ ence’6, and of company laws under which the real ownership of shares or the location of control is secret or difficult to determine, further complicates the situation. This chapter discusses the following issues, all of them arising from the relationship between in rem and in personam liability, or from associated difficulties of distinguishing between sub­ stance and procedure in admiralty:

• the treatment of maritime liens (including foreign maritime liens) in the proposed legislation (para 119-23); • the need for a specific nexus between a ship and the cause of action (para 124-5); • the relationship that should exist, in the case of statutory rights of action in rem,

between the ‘wrongdoing’ ship and in personam liability (para 126-37); • the need to lift the ‘corporate veil’ in certain circumstances to allow actions in rem to reflect the reality of ship-operating through linked companies (para 138-41); • the relation between actions in rem and in personam in admiralty (para 142-4).

118. Terminology. It is helpful to begin by adopting some shorthand terminology, which will be used throughout this Report. The ‘wrongdoing’ ship refers to the ship in connec­ tion with which the cause of action arises.7 The ‘surrogate’ ship (often loosely called a ‘sister ship’) is any ship other than the wrongdoing ship which it is sought to arrest in re­ spect of that cause of action.8 A ‘relevant person’ is a person who would have been liable (whether solely or jointly with other persons) had the action been brought in personam rather than in rem.9 Even with maritime liens there will almost invariably be someone personally liable.10 The only exceptions appear to be the liens for bottomry and

respondentia, with respect to which no action in personam is available. But if, apart from these cases, there will always be a relevant person in every action in rem on a maritime lien, that person will not always be the owner of the ship.11 Equally the relevant person in

5. In addition to demise charters and sub-charters by demise, the two categories commonly used are time and voyage charters. A time charter is the charter of the carrying capacity of the ship for a specified period, with the owner remaining responsible for the technical and navigational operation of the ship: ibid. A voyage charter is a charter of the carrying capacity of a ship for a specified voyage, and is thus usually of a relatively short duration. A ship may be sub-let on time or voyage charter by its demise char­ terer. in this sense the categories are not mutually exclusive. 6. On 'flags of convenience' see para 93. 7. See eg The Father Thames [1979] 2 Lloyd’s Rep 364, 368 (Sheen J). An alternative description is the 'of­

fending' ship: see eg The Banco [1971] P 137, 151 (Lord Denning MR). It is the ‘ship’ referred to in the Supreme Court Act 1981 (UK) in each of s 20(2)(a) — (s) either explicitly (in (a) — (h), (k) — (p) and (s)) or by necessary implication (in (j), (q) and (r)). 8. To simplify matters, this chapter and ch 9 will deal only with the action in rem in respect of the wrongdo­

ing ship itself. The question of actions in rem against surrogate ships is dealt with in ch 10. 9. Supreme Court Act 1981 (UK) s 21(4)(b). 10. Rosenfeld Hillas & Co Pty Ltd v The Ship Fort Laramie (1922) 31 CLR 56, 63 (Knox CJ); Shell Oil Co v The Ship Lastrigoni (1974) 131 CLR 1, 5 (Menzies J).

11. eg The Father Thames [ 1979] 2 Lloyd's Rep 264 (demise charterer personally liable on damage claim); The Castlegate [1893] AC 38, 52 (Lord Watson) (seamen’s wages, wide range of persons potentially liable); The Ripon City [1897] P 266 (master’s wages and disbursements, non-owner in possession of ship person­ ally liable: but see DR Thomas, Maritime Liens, London, Stevens and Sons, 1980, para 357 where this category is explained on the ground of estoppel of owners); Five Steel Barges (1890) 15 PD 142 (salvage, everyone who has an interest in the salved property liable).

Maritime Liens and Statutory Rights o f Action In Rem / 87

maritime claims which do not give rise to maritime liens may be a demise charterer12, time charterer13 or possibly a voyage charterer.14 1 5

Maritime Liens

119. The Present Law of Maritime Liens.'* The history of maritime liens in Anglo- Australian law was outlined briefly in para 14. The claims which give rise to maritime liens in Australia today16 are claims for salvage, collision damage, seamen’s wages, bot­ tomry and respondentia, master’s wages and master’s disbursements. Four of these (sal­ vage, collision damage, seamen’s wages, bottomry and respondentia) are creations of the

Admiralty Court.17 The other two, the liens for master’s wages and for master’s disburse­ ments, were created by statute in the 19th century. Although there is no recent explicit authority, it is safe to say that in the absence of statute no additional maritime liens would be recognised by Australian courts.18 The position with respect to the two liens of statutory origin, master’s wages and master’s disbursements, is a complicated one. The statutes creating the liens only purported to apply to masters of British-registered ships.19 2 0

But Dr Lushington in The Milford20 managed to avoid the fairly plain statutory language, interpreting it so as to allow a foreign ship’s master a maritime lien for wages. English courts consistently followed that interpretation, though not without some misgivings.21 It is fully accepted in the United Kingdom that the liens for wages and for disbursements are both available to foreign masters.22 2 3 It is not clear whether Australian courts would follow The Milford23 in interpreting the Merchant Shipping Act 1894 (UK) s 260, or whether they would only apply the liens created by s 167 of that Act to British-registered

ships. The Navigation Act 1912 (Cth) s 94 creates both the wages and disbursement liens

12. A demise charterer, having possession and full control of the ship, might be potentially liable on just about any maritime claim except one involving a dispute about mortgage, ownership or between co­ owners. 13. The sort of claims within Supreme Court Act 1981 (UK) s 20(2)(a) -(s) for which a time charterer might

incur personal liability include towage, pilotage, harbour dues, supply of bunkers, persona! injury, and lost or damaged goods carried under contract with the time charterer. 14. Of the items listed in n 13 the voyage charterer might incur liability with respect to the last two where pas­ sengers or goods are carried under contract with the voyage charterer. The other items are normally the

owner’s responsibility. 15. See generally Thomas (1980) esp chs 1, 4-8 ; W Tetley, Maritime Liens and Claims. Business Law Com­ munications, London, 1985, Part III; DC Jackson, Enforcement o f Maritime Claims. Lloyd's of London Press, London, 1985, esp ch 11-12. 16. Shell Oil Co v The Ship Lastrigoni' (1974) 131 CLR 1 followed English authorities and denied the exist­

ence of a maritime lien for necessaries. 17. It is accepted that the category of bottomry includes respondentia: Thomas (1980) para 371. Some writers regard additional maritime liens as arising by implication under statutory provisions creating charges on ships, or otherwise providing for recovery from the ship of expenses or costs incurred by third parties in

respect of the ship or its cargo; eg G Price, Law o f Maritime Liens. Stevens, London, 1940, 2, citing Mer­ chant Shipping Act 1894 (UK) s 513(2) and 567(2); Diseases of Animals Act 1894 (UK) s 46. See para 122 for references to similar provisions in Australian legislation. 18. Shell Oil Co v The Ship ’Lastrigoni' (1974) 131 CLR 1; Bankers Trust International Ltd v Todd Shipyards

Corp: The Halcyon Isle [1981] AC 221, 232 (Lord Diplock). cf The Acrux [1965] P 391, 403 (Hewson J) (categories of maritime liens cannot be extended except by legislation). For the recognition of foreign maritime liens, see para 123. 19. Merchant Shipping Act 1854 (UK) s 109, restricting the ambit of s 191; Merchant Shipping Act 1894

(UK) s 260, restricting the ambit of s 167. 20. (1858) Swab 362; 166 ER 1167. 21. The Tagus [1902] P 44. See also the dicta in Poll v Dambe[ 1901] 2 KB 579, 687. 22. See now Merchant Shipping Act 1970 (UK) s 18; Supreme Court Act 1981 (UK) s 7(a); Thomas (1980)

para 322. But the proposition in the text still to some extent rests upon inferences from provisions con­ cerning jurisdiction rather than any explicit statement in a substantive provision. 23. (1858) Swab 362; 166 ER 1167.

88 / Civil Admiralty Jurisdiction

but is only expressed to do so for Australian ships24, and it is doubtful whether an Aus­ tralian court would follow the logic used in The Milford to apply s 94 to masters of for­ eign ships. In 1905 a South Australian court held that the Merchant Shipping Act 1894 (UK) did not extend to give a maritime lien to the master of British ship registered in a part of the King’s dominions other than Britain; no maritime lien existed for disburse­ ments by the master of a vessel registered in South Australia.25 State and Territory legisla­ tion has attempted to overcome this gap in various ways.26 It is also possible that the courts will themselves extend the common law lien for wages to cover master’s wages.27

120. Characteristics o f Maritime Liens. All claims which give rise to maritime liens may be enforced in admiralty by the arrest of the wrongdoing vessel. This right to arrest sur­ vives any change in the ownership of the vessel, whether the change in ownership took place before or after the proceedings were commenced. In situations of insolvency mari­ time liens rank above mortgages and other claims in the admiralty order of priorities.28

Despite these attributes, Anglo-Australian admiralty law has never made it clear whether a maritime lien is merely a procedural device by which to compel the defendant to ap­ pear29 or ‘a right of property given by way of security for a maritime claim’.30 The result seems to be that, while for some purposes the procedural view is correct, it is recognised that some characteristics point ‘in the direction of a maritime lien partaking of the nature

of a proprietary right in the ship’.31 This is particularly true of the ability to enforce by action in rem a maritime lien despite a change in ownership of the ship (the so-called 'droit de suite'). Although the point is not free of uncertainty it is probably the case that a maritime lien is a

substantive right whereas a statutory right of action in rem is in essence a procedural remedy.32 121. The Creation o f New Maritime Liens. Against this background, a number of ques­ tions arise. The first is whether the proposed legislation should seek to extend the range of maritime liens beyond those presently existing under Australian law.33 The view that maritime liens are substantive or proprietary rights might appear to imply that new mari­ time liens could not be created in reliance only on the power to confer admiralty jurisdic­ tion under s 76(iii) of the Constitution.34 Even if this view is accepted, it does not follow

24. As defined in s 10 of the Act. 25. The Louise Roth [1905] SALR 107. 26. See eg Merchant Seamen Act 1935 (Tas) s 4(1), Merchant Shipping Act Application Act 1903 (WA) s 2(1), which simply extend the relevant provisions of the Merchant Shipping Act 1894 (UK) to fill the gap.

Since the extension in the Tasmanian Act is in ambulatory terms the relevant legislation is presumably now the Merchant Shipping Act 1970 (UK) s 18. The Seamen's Act 1898 (NSW) s 57(1) creates a lien for wages of masters of local vessels but not for disbursements. The Queensland Marine Act 1958 (Qld) s 44(1) gives jurisdiction over both types of lien to various courts but does not itself purport to establish any categories of lien. The Marine Act (NT) s 49 creates a master’s lien for disbursements but not for wages. 27. cf The Royal Wells [1984] 3 All ER 193 (Sheen J) where master’s and seamen’s wages claims were assimi­

lated for priorities purposes. 28. For a comparative review see 1 Pives-Filho, ‘Priority of Maritime Liens in the Western Hemisphere: How Secure is Your Claim?’ (1985) 16 Inter-American LR 505. See further ch 12. 29. See generally O’Hare (1979) 200-7; Gilmore & Black (1975) 589-90; Wiswall (1970) ch 6; Thomas (1980)

para 8-9.

30. Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221, 250 (Lords Salm­ on and Scarman, dissenting). Although most of the discussion in the literature discusses the issues in terms of two competing theories, other theories are sometimes advanced: see eg Thomas (1980) para 9 for a third, ‘conflict’, theory. 31. The Halcyon Isle [1981] AC 221, 234 (Lord Diplock, speaking for the majority). 32. Thomas (1980) para 46. On the substantive character of maritime liens see The Heinrich Bjorn (1885) 10

PD 44, 53-6 (CA) afFd (as The Henrich Bjorn) (1886) 11 App Cas 270, 277-8 (Lord Watson), cf also Hamilton v Baker; The Sara (1889) 14 App Cas 209, 214-5 (Lord Halsbury LC). 33. The question of the recognition of foreign maritime liens (ie maritime liens created under foreign law either as the lex loci or the proper law of the claim in question) is a separate issue, discussed in para 123. 34. cf para 80.

Maritime Liens and Statutory Rights o f Action In Rem / 89

that the creation of new maritime liens falls outside the Commission’s Terms of Refer­ ence. These require it to report upon ‘all aspects of the Admiralty jurisdiction in Aus­ tralia’. The term ‘the Admiralty jurisdiction’ is to be construed broadly, so as to include the creation or extinction of maritime liens: it would be strange to treat maritime liens as

not being an aspect of the admiralty jurisdiction. On this basis, the question is whether the Commission should recommend the creation of new maritime liens, either in particu­ lar cases or (on the model of the United States35) all cases, of admiralty jurisdiction. Leaving aside for the moment questions of constitutional power, the following considera­

tions apply:

• The policy of the English courts, so far followed in Australia, has been not to create new classes of maritime liens.36

• The United States position is exceptional. International efforts at the unification of maritime law have been unsuccessful in achieving agreement on the appropriate range of maritime liens.37 By contrast, expanding the scope of rights to arrest ships without creating new maritime liens is less likely to meet with international objec­ tions38, since statutory rights of action in rem rank below maritime liens and mort­

gages in the admiralty order of priorities, and do not (unless carried into effect by the commencement of proceedings) prevail against a new owner of the ship.

• There is little indication of a demand or need in Australia for creation of new maritime liens.

• A problem which sometimes occurs is that of third parties dealing with persons ap­ parently authorised to act on behalf of the ship but who may not be legally the agents of the owners. Whatever provision is necessary to deal with this problem39, it does not require the creation of new maritime liens.40

For these reasons, and pending agreement at the international level on the proper scope of maritime liens, new maritime liens should not be created.

122. The Treatment o f Maritime Liens in the Proposed Legislation. Whatever the appro­ priate classification of maritime liens, if there is no head of jurisdiction under which the only courts in Australia with power to order arrest in rem may order arrest on a particu­ lar maritime lien, the lien is effectively negated in Australian law. It is clear therefore that jurisdiction has to be conferred over claims to enforce maritime liens. The question is

what form that provision should take.

• Restatement of Law relating to Maritime Liens. One possibility is to define with some precision the claims which give rise to maritime liens under Australian law, with a view to conferring jurisdiction only over those liens. While the conclusion that new maritime liens should not be created gained general support during the Commission’s consultations, there was also some support for an exhaustive defini­ tion or restatement of the law. The present position remains obscure in a number

35. For the position in US admiralty law, see Gilmore & Black (1975) ch 9. 36. The Lastrigoni (1974) 131 CLR 1; The Halcyon Isle [1981] AC 221. 37. The 1926 & 1967 Maritime Liens and Mortgages Conventions (as to which see para 94 n 31) have not been widely accepted, but there is no indication that wider categories of liens than those allowed by the

Conventions would be internationally acceptable. 38. cf Brussels Arrest Convention 1952, art 1. Expansion of admiralty jurisdiction in other common law- countries has been by way of expanding categories of arrest rather than the creation of new maritime liens (eg South Africa, Canada, New Zealand, Singapore). 39. See para 126-37 for discussion of the problem and possible solutions to it. 40. cf Brussels Arrest Convention, art 9.

90 / Civil Admiralty Jurisdiction

of respects.41 This is especially the case with the two liens with a statutory origin, master’s wages and master’s disbursements.42

• Conferral of Jurisdiction over 'Maritime Liens’ without Definition. The alternative is simply to confer jurisdiction over maritime liens either without any attempt at defi­ nition43, or with only an indicative or inclusive definition44, leaving the substance of the law to be derived from other sources.

There are, no doubt, difficulties whichever course is taken. An initial problem with a re­ statement of the law of maritime liens is its extent, since it involves a codification of what has historically been the major element of admiralty law. There would be difficulty in performing this task in a reasonably concise way in legislation which is primarily jurisdictional in scope. Moreover the legislation will confer a parallel statutory right of

action in rem with respect to almost all claims giving rise to maritime liens.45 So far as these claims are concerned, it will only be necessary to rely on a maritime lien rather than a statutory right of action in rem where the relevant person was not the owner when the proceedings were commenced, or where priorities issues arise. These situations are ex­ ceptional. It does not seem necessary to define maritime liens in detail merely to provide for them. This conclusion is reinforced by the doubts about the extent of power in s 76(iii) to codify the law relating to maritime liens.46 For these reasons the proposed leg­ islation is not the appropriate place to attempt either to reform, or comprehensively to re­ state, the existing law of maritime liens. If the uncertainties as to the scope of the liens for master’s wages and disbursements are of concern (and there is no indication that they are) consideration should be given to amending s 94 of the Navigation Act 1912 (Cth) so as to make it clear that masters of foreign vessels in Australian ports have a maritime lien on their ship for their wages and disbursements. Accordingly, the legislation should mere­

ly state that an action in rem may be brought in any case in which there is a maritime lien or other charge on any ship or other property.47 To help those unfamiliar with admiralty jurisdiction, an indicative list of the four significant categories of lien (salvage, damage, wages and master’s disbursements) should be added. The legislation should also make it

clear that no new class of maritime lien is being created. The expression ‘other charge’ in the proposed provision is intended to cover statutory charges created by the formula ‘[the amount] shall be a charge upon the ship’ which is found in Commonwealth, Imperial and State legislation.48 It would be possible to omit the expression. In most situations in which the formula is used the legislation creates its own means of enforcement, either by creating a power of detention or by assimilating the ‘charge’ to a maritime lien.49 A pos­

41. cf the comment in The Father Thames [1979] 2 Lloyd's Rep 364, 368 (Sheen J): ‘A maritime lien is not de­ fined in the 1956 Act. That is not suprising because it is more easily recognised than defined’. 42. See para 119 where the statutory provisions are discussed. 43. As in Supreme Court Act 1981 (UK) s 21(3). 44. cf Admiralty Act 1973 (NZ) s 2: ‘Maritime lien’ without derogating from the generality of the term, in­

cludes a lien in respect of bottomry, respondentia, salvage of property, seamen’s wages and damage'. 45. The exception is the virtually obsolete category of bottomry and respondentia. It is not proposed to confer jurisdiction (including jurisdiction in personam) over these other than as maritime liens: cf Wiswall (1970) 2 1 1 . 46. See para 80. 47. For the definition o f'other property" see para 109-10. 48. See eg Lighthouses Act 1911 (Cth) s 19(3) (lighthouse dues); Navigation Act 1912 (Cth) s 38(1) (appren­

tice’s indentures), s 128(2) (medical expenses of crew owed to Commonwealth), s 163A(d) (expenses of maintaining distressed seamen); Quarantine Act 1973 (Cth) s 65 (quarantine expenses); Protection of the Sea (Civil Liability) Act 1981 (Cth) s 21 (Commonwealth’s expenses in pollution clean-up); Environment Protection (Sea Dumping) Act 1981 (Cth) s 17(3) (penalties for breach of Act); Merchant Shipping Act

1894 (UK) s 513(2) (damage caused to landowner by those attending a wreck); Queensland Marine Act 1958 (Qldj s 59(2) (medical expenses of crew owed to State). 49. An example of the latter is Navigation Act 1912 (Cth) s 128(2) under which the charge may be recovered 'in the same court and manner as wages due to seamen'. A seaman has a maritime lien for wages.

Maritime Liens and Statutory Rights o f Action In Rem / 91

sible advantage of omitting ‘other charge’ would be that it would force legislatures wish­ ing to take advantage of the admiralty procedure explicitly to create new maritime liens50 (or at least not to rely upon the word ‘charge’, which arguably leaves it unclear whether or not a full maritime lien is being created). On the other hand the term is used without

elaboration in all relevant overseas legislation. It is desirable that the admiralty courts have jurisdiction over statutory charges analogous to liens, especially in dealing with in­ solvent ships, where priorities issues are likely to arise involving such charges. The term

‘other charge’ should be included without elaboration in the proposed legislation.

123. Foreign Maritime Liens. A separate issue that remains uncertain in Australia con­ cerns maritime liens arising outside the forum. Where an act or event that gives rise to a maritime lien under the relevant foreign law would not have given rise to a maritime lien under Australian law, should an Australian court nonetheless treat it as a maritime lien

and thereby acquire jurisdiction over the matter? This question, so far as it concerns the law of Singapore, was answered in the negative by the Privy Council in The Halcyon Isle.51 But the decision was by a bare majority52 and the position in other common law countries is different. In particular, the Canadian courts have answered the question in

the opposite way53, as have the courts of South Africa.54 As the majority and dissenting judgments in The Halcyon Isle reveal, the arguments supporting the alternative positions are fairly evenly balanced. On the one hand, the minority view is more consistent with general conflicts of law principles, assuming that maritime liens are properly classified as

substantive rather than procedural rights for this purpose. On the other hand, the conse­ quences of recognising a foreign maritime lien (for example for goods supplied to a ship) where the equivalent local claim does not give rise to a lien is to give the foreign claimant priority over the local one, even where the foreign law’s classification of the claim as a

lien is out of line with any international consensus on the scope of liens.55 5 6 Indeed, a for­ eign lien might attach to a claim which was not a maritime claim as defined in the Brus­ sels Arrest Convention of 1952s6, in which case to allow arrest on the lien would appear to contravene art 2 of that Convention.57 5 8 Although the dominant view expressed to the

Commission favoured the Canadian and South African approach rather than that of the majority in The Halcyon Isle5S, the matter is best left to be resolved through further at­ tempts at international unification (either through amendments to the Arrest Convention

50. It follows from the conclusion in this para (and the point is made explicit in ch 13) that, under the pro­ posed legislation, State and Territory Parliaments will retain their existing powers to create new maritime liens.

51. Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221. Singapore law on the point was acknowledged to be identical to English law. 52. Lords Diplock, Elwyn-Jones & Lane; Lords Salmon & Scarman dissenting. 53. The Strandhill v W Hodder Inc [1926] SCR 680; Todd Shipyards Corp v Altema Compania Maritima SA;

The loannis Daskalelis [1974] SCR 1248. The decision of the Privy Council in The Halcyon Isle has not altered the attitude of Canadian Courts: see eg Marlex Petroleum Inc v The Ship Har Rai [1984] 4 DLR (4th) 739, 744 (FC). 54. Southern Steamship Agency Inc v M V 'Khalij Sky' 1986 (1) SAf LR 485. 55. See para 94 for the limited degree of consensus so far. 56. See para 94.

57. The CM1 Draft Revision o f the Brussels Convention (Lisbon, 1985) adopts a broader and indicative, rather than exclusive, definition of ‘maritime claim’ but it also specifically limits the categories of mari­ time liens: art 3(1 )(a). See para 94 n 47. 58. Professor DC Jackson, Submission 25 (14 February 1985) 4; PA Cornford, Submission 67 (14 November

1985) 2. cf Ebsworth & Ebsworth, Submission 31 (1 March 1985) 6. Opinions expressed in the literature also tend to favour the minority view in The Halcyon Isle: eg Thomas (1980) para 578-9 (written before the decision); Jackson (1985) 221-2, 345-9; Tetley (1985) 545-50. A compromise was suggested by PG Willis, Deputy Corporate Solicitor, BMP, Submission 68 (15 November 1985) 4-5 of recognising only those foreign maritime liens generally accorded recognition in international maritime law: in particular those falling within the categories defined in art 4 of the Lisbon CMI draft Liens and Mortgages Conven­ tion.

92 / Civil Admiralty Jurisdiction

or through a further and more satisfactory Convention on Maritime Liens and M ort­ gages). In the absence of formal international agreement (and consistently with the rec­ om m endation in para 122 relating to liens generally) the question is best left to the courts to resolve, taking into account developments in other jurisdictions.

Statutory Rights In Rem: Extent of Enforceability

124. Identifying the Wrongdoing Ship. The recommendations as to maritime liens in para 121 and 123 will mean that the bulk o f adm iralty jurisdiction (including cargo claims and claims by ship repairers or suppliers) will continue to involve statutory rights of action in rem rather than maritime liens. The following paragraphs deal with the ques­ tion when such an action can be brought against a ship, in particular where the owner of the ship is not the relevant person.59 The first issue to be decided is whether there is any need for the concept o f a ‘wrongdoing ship’ as a basis for determining which ship may be arrested on a particular maritime claim. Like questions involving the enforceability of maritime liens, this issue is often discussed in terms of the two main rival theories con­ cerning the nature of the action in rem.60 U nder the personification theory the ship itself is seen as the wrongdoer and hence as the defendant in an action in rem. Under this theory the wrongdoing ship is the starting point and, under the theory in its pure form, the finishing point, in considering what ship may be arrested.61 Under the procedural theory in its widest form ‘the process in rem against the ship is in the nature of foreign at­ tachment to compel the owner's appearance by subjecting to the court’s control property within its territorial jurisdiction’.62 6 3 Because arrest in rem confers jurisdiction in Anglo- Australian admiralty law two requirements appear necessary to prevent such arrest being nothing more than the exorbitant and internationally unacceptable arrest ad fundandam jurisdictionem.60 The first is that the cause of action should be a maritime claim. The sec­

ond is that the res should be of a maritime character, a ship or its cargo, freight or wreck. These requirements ensure that the arrest in rem fits into the internationally recognised exception to the general principle of territorial jurisdiction.64 But the procedural theory, even as constrained by these requirements, does not identify the particular ship which may be arrested in the way in which the personification theory does. Although, broadly, the claim must have arisen in connection with a ship and only a ship may be arrested on the claim, there is no requirement imposed by the strict logic of the procedural theory that the same ship be arrested as is connected with the claim. In other words, the issue is whether, if the defendant happens to own a ship, the plaintiff can arrest that ship. The claim arises in respect of a ship and a ship, though not necessarily the same ship, is ar­ rested. The admiralty exception is invoked and exorbitant assertion of jurisdiction is avoided. On this theory, the answer would appear to be that such arrest should be al­ lowed. English courts have approached the question as one o f statutory interpretation. The Administration of Justice Act 1956 (UK) s 3(4) appeared to allow proceedings in rem under s 1 (1 )(e), that is for ‘any claim for damage received by a ship’. However Lord

Diplock pointed out in The Eschersheim that

the description ‘any claim for any damage received by a ship’ describes a claim arising ‘in con­ nection with’ the ship that receives the damage. In such a claim the owners of the ship that re­ ceives the damage would be plaintiffs. They cannot invoke Admiralty jurisdiction by an action

59. See para 118 for the meaning o f ‘relevant person’. 60. See para 17 for references to the literature on the rival theories. 61. For the effect o f ‘surrogate ship’ arrest on this theory see para 125. 62. Gilmore & Black (1975) 589-90. 63. See para 94 n 42 on arrest ad fundandam jurisdictionem. 64. See para 96.

Maritime Liens and Statutory Rights o f Action In Rem / 93

in rem against their own ship; and any claim to arrest some other ship must be founded upon some paragraph other than (e). Had the draftsman of section 3(4) been meticulous he would have omitted any reference to para (e) of section 1(1); but the other requirements of the sub­ section prevent any right of arrest arising under that paragraph.65 As a matter of the interpretation of s l(l)(e), this reasoning seems correct, and the Su­ preme Court Act 1981 (UK) s 21(4) is worded so as to reflect Lord Diplock's reasoning.66

But it should be noted that in two earlier decisions Justice Brandon had adopted a rather different interpretation. Both involved the head of jurisdiction ‘use or hire of a ship’67: in both cases the owner of the ship hired was allowed, without any real argument on the point, to proceed in rem. In The Queen of the South the claim was by a small boat oper­

ator whose launch was hired to assist in mooring the ship which was the subject of in rem proceedings.68 In The Conoco Britannia the claim was by a tug owner whose tug was hired to assist in berthing a ship; again it was that ship against which the writ in rem was issued.69 The status of these decisions is now doubtful.70 The reasoning in The Es- chersheim is applicable to all heads of admiralty jurisdiction, not merely ‘damage re­ ceived by a ship’.71 The language of the 1952 Arrest Convention72 and of other overseas legislation73 lends itself to similar interpretation.

125. The Competing Arguments. It is helpful to set out the competing arguments in some detail, since they shed light on the nature of the action in rem itself. • Arguments for Identifying a Wrongdoing Ship. As a matter of policy, clearly one ar­ gument is that Australia should adhere to the position taken by countries whose le­

gal systems are similar to Australia’s, and by the 1952 Arrest Convention. The other main argument in favour of a requirement that the ship which is the subject of the action in rem should be identified with the ship in respect of which the claim arose, is that the alternative approach would lead to a very random availability of remedies in admiralty. The advantage of the requirement is that for any valid ad­ miralty claim there will be an identifiable ship which can be named in in rem pro­ ceedings as the wrongdoing ship.74 In the absence of such a requirement, the owner

of the ship referred to in any head of admiralty jurisdiction can proceed in rem if the defendant happens to own a ship. If the ship repairer, supplier of necessaries, cargo owner, pilot or mortgagee happens to own a ship within the jurisdiction, an action in rem can be brought. For example, if a dispute about overpayment of

wages arose between a ship’s master and its owner, the owner could proceed in rem against a yacht which the master happened to own. The strangeness of this result is underlined by the fact that the relevant head of admiralty jurisdiction in other countries allows only claims by a master for wages75; the possibility of an owner proceeding in rem against the master has never been considered. To take another

65. [1976] 1 All ER 920, 928 (Lord Diplock, with whom the other four Lords agreed). 66. Although ‘damage received by a ship’ remains a head of jurisdiction (s 20(2)(d)), proceedings are only al­ lowed in personam under it, not in rem (s 21(4)). For the argument that there should nonetheless be a right of arrest for ‘damage done to a ship’, see para 172.

67. Administration of Justice Act 1956 (UK) s 1(1 )(h). 68. [1968] P 449. 69. [1972] 2 QB 543. In fact the writ named ‘sister ships’ of the ship to which the service had been rendered but nothing in the present argument turns on this. 70. See The Eschersheim [1976] 1 All ER 441, 459 (CA) (Sir Gordon Willmer).

71. [1976] 1 All ER 920, 927 (Lord Diplock). 72. Art 3(1). 73. Federal Court Act 1970 (Can) s 43(2); Admiralty Act 1973 (NZ) s 5(2); Admiralty Jurisdiction Regulation Act 1983 (S Af) s 3(5).

74. If surrogate ship arrest is permissible, some other ship may be served and arrested, but the first step in de­ termining whether proceedings in rem can be brought would still be to identify the wrongdoing ship. For surrogate ship arrest see ch 10.

75. eg Supreme Court Act 1981 (UK) s 20(2)(p).

94 / Civil Admiralty Jurisdiction

example, assume A and B agree to a joint venture for the charter of a ship from C and that the joint venture agreement is within admiralty jurisdiction.76 If disputes arise, the ability of A to proceed against B in rem will depend on the purely fortu­ itous circumstance whether B owns a ship. Where one joint venturer owns a ship and the other does not, the ability to proceed in rem in relation to disputes arising out of the joint venture will be asymmetrical as well as fortuitous. Given the su­ periority of proceeding in rem over in personam in many cases, there would be considerable incentive for a plaintiff to attempt to cast the claim as a maritime claim whenever the defendant happens to own a ship. A final argument against re­ laxing the nexus requirement is that doing so would serve no real need. It is own­ ers of ships who tend to be foreign based and to have mobile and perhaps elusive assets. Those whom the owner of the ship in respect of which the claim arises might sue tend to be firmly based with fixed assets in one place, even if they hap­ pen also to own a ship.

• Arguments against a Wrongdoing Ship Requirement. The arguments in favour of abandoning the requirement that the ship subject to proceedings in rem should be the ship in respect of which the claim arose are partly rebuttals of the arguments already made and partly arguments based on the need for some general consist­ ency in the theory of when an action in rem should be available. The ‘accidental’ way in which the expanded ability to proceed in rem would be available is not necessarily fatal. The fact that a right to proceed in rem will only sometimes be available on the facts, it can be argued, is no reason to deny the right in any given case. There is also a question of consistency. In chapter 10 it is recommended that surrogate ship arrest be introduced in Australia. The availability of surrogate ship arrest depends upon the fortuitous ownership of another ship by the person liable in respect of the wrongdoing ship. An action in rem against a surrogate ship will allow the arrest of that ship even though there is no wrongdoing ship (for example, because it has sunk) or even where on the facts no proceeding could ever have been brought against the wrongdoing ship.77 The whole notion of actions in rem against surrogate ships relies on the rejection of the personification theory and ac­ ceptance of the procedural theory. Arguably, allowing actions in rem against surro­ gate ships marks merely another step in a long process of abandoning the personi­ fication theory. The next step in this process would be to abandon the nexus be­ tween the ship in respect of which the claim arose and the ship which may be pro­ ceeded against in rem. At present Australian admiralty jurisdiction lags well be­ hind in this process. But it could be argued that proper reform should not only take the catch-up step of allowing surrogate ship arrest, but should go a step fur­ ther and allow arrest without the hitherto required nexus.

As these arguments might suggest, arguing in terms of competing theories is confusing rather than helpful.78 The fact that the scope of arrest is extended in one direction (surro­ gate ship arrest) is not of great significance in considering extension in a different way. The issue is one of the need for and effectiveness of remedies. The proposed Australian legislation should adopt the solution embodied in the overseas legislation. Consistency with these models has considerable value. The abandonment of a nexus requirement would tend to favour ship owners as against ship repairers, suppliers of necessaries, pilots or mortgagees, who ‘fortuitously’ own a ship. It is not in Australia’s interests unilaterally to develop the right of arrest in this way, and it is hard to see any need for such a devel­

76. Which it probably is: see Mortensen and Lange v Neptune International Shipping Ltd [1981] 2 FC 232, 235 (Mahoney J) interpreting Federal Court Act 1970 (Can) s 22(2)(i). 77. See para 134 n 123 for an example of a shipowner/time charterer dispute in which the former is plaintiff. 78. cf O’Hare (1979) 206.

Maritime Liens and Statutory Rights o f Action In Rem / 95

opment. To the extent that cases such as The Queen of the South 79 and 77ie Conoco Britannia 80 have revealed gaps in the law where a ship of the plaintiffs and a ship of the defendant’s are both involved in the facts out of which the claim arises, these gaps can best be filled by selective rewording of particular heads of admiralty jurisdiction, so as to make it clear that the defendant’s ship is a (or the) relevant ‘ship’ referred to.7 9 8 0 81

Nexus Between Wrongdoing Ship and In Personam Liability

126. Introduction. Compared with maritime liens, statutory rights of action in rem have always been regarded as ‘procedural’ rather than substantive rights. They have been thought of as a method of pursuing the owner of a ship with respect to the owner’s per­ sonal liabilities arising in connection with the ship.82 This was the basis on which the Acts

of 1840 and 1861 were held not to create maritime liens over new subjects of admiralty jurisdiction. In interpreting the Admiralty Court Act 1840 (UK) Lord Watson said:

The whole of the provisions of the Act 3 & 4 Viet, c 65 appear to me to relate to the remedies and not to the rights of suitors. Sect 6 merely confers ‘jurisdiction to decide’ certain claims which the Court of Admiralty had previously no power to entertain. The enactment enables every person having a claim of the nature of one or other of those specified in sect 6 to bring an action for its recovery in the Admiralty Court, but it cannot in my opinion have the effect of altering the nature and legal incidents of the claim.83

The creation of new statutory rights of action in rem would clearly be a matter of pro­ cedure (and thus of ‘jurisdiction’ in the narrowest sense) if the action is provided to en­ able satisfaction of claims against a person or persons with a recognisable legal interest (for example, as owner) in the relevant ship at the time the action is commenced. How­

ever, it is not so clear that the establishment of new statutory rights of action in rem would be merely procedural or jurisdictional if no link were established between the owner’s in personam liability at the time the action was commenced and the cause of ac­ tion in rem. But there may be good reasons for not having such a link in all or some cases. That is, there seems to be a need to be able to arrest the vessel with respect to which the claim arose even though its owner is not the person who would have been per­ sonally liable had the action been brought in personam, for example in some cases where that person is a time charterer. Thus there may be good reasons for extending statutory

rights of action in rem so as to create something analogous to a droit de suite against the owner of the ship. That right need not be equivalent to a maritime lien. The priorities of competing claims need not be affected, and a change of ownership before the commence­ ment of the action could extinguish the right to proceed in rem against the ship in ques­ tion. Nevertheless, so far as it goes such a right would appear to have a ‘substantive’ ef­

fect. The position at common law appears to be that a statutory right of action in rem does not lie unless —

79. [1968] P 449. 80. [1972] 2 QB 543. See para 124. 81. In particular, both cases would be covered by a head of jurisdiction ‘services supplied to a ship'. See para 171.

82. cf Price (1945) 22. 83. The Henrich Bjorn (1886) 11 App Cas 270, 278. The reasoning of Menzies J in Shell Oil Co Ltd v The Ship Lastrigoni (1974) 131 CLR 1 is suggestive of a similar attitude. For a suggestion that the Supreme Court Bill 1981 (UK) cl 21(3) was open to similar attack, see Jackson (1982) 241. Amendment in the House of

Lords altered the whole scope of cl 21 and rendered the point moot. Lord Watson’s reasoning has been followed by Canadian courts in interpreting the admiralty provisions of the Federal Court Act 1970 (Can) although the constitutional position there is somewhat different to that in Australia: Westcan Stevedoring Ltd v The Ship '/Im ar'[1973] FC 1232; McCain Produce Co Ltd v The Ship M V 'Rea‘[1978] 1 FC 686.

96 / Civil Admiralty Jurisdiction

• the owner is liable in personam on the claim84, or

• the owner can be treated as if liable by virtue of a form of implied consent (for ex­ ample, in some cases of liabilities of demise charterers).85

The provision of an action in rem in cases the common law rule does not cover would re­ quire a rule to be expressed or implied to the effect that a plaintiff who can establish a claim relating to the ship in one of the specified ways is entitled to satisfaction from the proceeds of the sale of the ship (or any bond or other security substituted for the ship), notwithstanding that the owner of the ship is not liable in personam on the claim.86 As was pointed out in chapter 5, it is not clear whether such a rule would be regarded as merely ‘jurisdictional’ or ‘procedural’ for the purposes of s 76(iii), even though it is a mat­ ter of admiralty jurisdiction in the broad sense.87 In England the solution to this potential problem is merely one of drafting technique, of making it clear that the legislation relates both to ‘the remedies’ and ‘the rights of suitors’.88 But in Australia legislation dealing with

‘the rights of suitors’ might be found to be outside s 76(iii) of the Constitution and only capable of being upheld by powers such as those in Constitution s 51(1), (20), (29).89 On the other hand, this argument is by no means convincing. It has always been a character­

istic of admiralty jurisdiction that it affected or was capable of affecting third parties. In other contexts the courts have declined to accept that s 76(iii) can be confined to a ‘ste­ reotyped common law admiralty jurisdiction’.90 Admiralty legislation in other countries has extended the right of action in rem to cases where the owner is not liable in personam. In the following discussion it is assumed that constitutional means can be found to create new statutory rights of action in rem in appropriate cases.91 The issues of principle and policy need to be considered on their merits.

84. The Druid (1842) 1 W Rob 390, 399; 166 ER 619, 622 (Dr Lushington); The M Moxham (1876) 1 PD 107, 111 (James LJ); The Tolla [1921] P 22; The Castlegate [1893] AC 38, 52 (Lord Watson); The Utopia [1893] AC 492; The Tervaete [1922] P 259; cf The St Merriel [1963] P 247, 256 (Hewson J). Australian authorities include: Rosenfeld Hillas & Co Ltd v The Ship Fort Laramie (1922) 31 CLR 56, 63 (Knox CJ); Dalgety & Co Ltd v Aitchison; The Rose Pearl (1957) 2 FLR 219, 227-9 (Kriewaldt J); The Lastrigoni (1974) 131 CLR

1, 5 (Menzies J). See the discussion by PM Hebert, ‘The Origin and Nature of Maritime Liens’ (1930) 4 Tulane LR 381, 388-91. The owner may in some circumstances be liable on a claim notwithstanding that the ship is chartered or requisitioned, either by operation of the general law or by virtue of special rules of maritime law: cf The Meandros [1925] P 61 (salvage); Phillips v Highland Railway Co (1883) 8 App Cas 329, 336-8 (wages and wrongful dismissal); The Tolla [1921] P 22 (disbursements on master’s ostensible authority). 85. According to Hebert (1930) these cases fall into two classes. The first and most important involves pos­

session with the owner’s consent and authority: The Ticonderoga (1857) Swab 215, 217-8; 166 ER 1103, 1104 (Dr Lushington); The Lemington (1874) 2 Asp MLC (NS) 475, 478 (Sir R Phillimore); The Tasmania (1888) 13 PD 110, 115-118 (Hannen P); The Ripon City [\S97] P 226, 242-5 (Barnes J); cf Foong Tai & Co v Buchheister ά Co [1908] AC 458. These cases were criticised and distinguished by Hill J in The Sylvan Arrow [1923] P 220 (collision of requisitioned ships) (and cf The St Merriel [1963] P 247, 256 (‘not pre­ pared to enlarge the area of exceptions’)). But see the explanation in The Andrea Ursula [1973] QB 265, 269-70 (Brandon J). The second class involves wrongful possession: eg The Edwin (1864) Br & L 281, 285; 166 ER 365, 367 (Dr Lushington). 86. cf Brandon J (in a slightly different, but analogous context):

the jurisdiction which is invoked by an action in rem ... is the jurisdiction to hear and determine the questions and claims listed ... I see no reason why, once a plaintiff has properly invoked that jurisdic­ tion by bringing an action in rem ... he should not, despite a subsequent change of ownership of the res, be able to prosecute it through all its stages, up to and including judgment against the res, and

payment of the amount of the judgment out of the proceeds. The Monica S' [1968] P 741, 773. 87. cf Brandon J, id, 768-9, pointing out that in rem procedures on any view produce ‘substantive’ effects in many cases. 88. cf The Henrich Bjorn (1886) 11 App Cas 270, 278 (Lord Watson). 89. See para 74-80. 90. John Sharp & Sons Ltd v The Ship Katherine MackalT( 1924) 34 CLR 420, 428 (Isaacs J). See para 70. 91. See further para 137.

Maritime Liens and Statutory Rights o f Action In Rem / 97

127. The Need for Reform? The principal argument for reform arises from the complex and often obscure ways in which control over especially foreign trading ships is exer­ cised. A person dealing in Australia with a foreign ship is likely to be dealing with an agent who may be an agent for a demise charterer or sub-charterer, for an associated

company or for a range of other persons. For example, in Cramb Tariff Service v Hoko Senpaku K K 92 the first defendant was the owner of the ship and the employer of the mas­ ter; the second defendant was a time charterer; the third defendant was a time charterer; the fourth defendant was the agent of the demise charterer; and the fifth defendant was the demise charterer. The first four defendants were Japanese companies, the fifth was

Panamanian. All appear to have cooperated to prevent the plaintiff from discovering the correct party to sue, provoking the judge into commenting:

It is self evident that the entire method of procedure whereby shippers are entitled to make claims against those who carry their goods at sea is in urgent need of revision in order to en­ sure that this sort of situation cannot arise.9 2 93

The Commission has been told of other cases where the identity of the relevant person and that person’s relationship to the vessel have been difficult or even impossible to dis­ cover, at least in time for proceedings in rem to be commenced. There have also been cases where effective control over a vessel has been vested not in the owner but in a long­ term time charterer.94 It can be argued that an effective admiralty regime should not cast

the burden of determining ownership or other relationship with the vessel on the person dealing with the vessel. The vessel should be able to be served and arrested, with the ef­ fective liability to meet any judgment a matter to be resolved between the various persons with interests in the ship.

128. The Options. It is helpful to consider these issues in the context of the provisions which have been adopted or proposed in other jurisdictions. It is clear that a statutory right of action should be able to be brought where the owner of the wrongdoing ship is the relevant person. The question is under what heads of admiralty and maritime juris­

diction (if at all) should it be possible to commence proceedings in rem against a wrong­ doing ship where its owner is not the relevant person. The options include:

(a) owner’s liabilities only (present Australian position; 1983 South African Act); (b) under all heads, with service of process conferring jurisdiction over the merits (Brussels Arrest Convention on one view of English text; 1981 UK Bill before its amendment in the House of Lords);

(c) under all or most heads of jurisdiction where a demise charterer is the relevant person (1981 UK Act; 1973 NZ Act); (d) in respect of traditional maritime liens plus a limited number of other cases (1970 Canadian Act);

(e) in respect of maritime liens, owner’s liabilities, and also of charterer’s liabilities with right of arrest limited to duration of charter (no overseas equivalent).

Some of these options may be combined.

129. No Action In Rem without Owner's In Personam Liability. Option (a) represents a long-standing status quo. In the words of Justice Menzies, describing this status quo in Shell Oil Co v The Ship ‘Lastrigoni’:

92. Unreported, NSW S Ct, 22 November 1983, Rogers J. This was a cargo claim brought in personam in the Common Law Division. 93. Transcript of Judgment, 3. 94. On the sometimes difficult distinction between demise and time charters cf Frosso Shipping Corporation v

Richmond Maritime Corporation 1985 (2) SAf LR 476, 479-81 (Berman AJ).

98 / Civil Admiralty Jurisdiction

Proceedings in admiralty are intended to facilitate the enforcement of liabilities, not to allow pressure to be put upon a person who is himself under no liability in respect of the liabilities of others.95

Putting pressure may be precisely the effect of a maritime lien.96 But these are relatively few and well-established, and courts (outside the United States) have been reluctant to create new maritime liens. The United Kingdom only moved from option (a) in 198197, primarily in response to criticisms that its law did not comply with the 1952 Arrest Con­ vention to which it is a party. At present Australia is not considering becoming a party to that Convention.98 To one not versed in admiralty law option (a) seems most appropriate. Why should a ship belonging to one person be arrested on a claim for which someone else is personally liable? It might also be thought that admiralty is already more generous to plaintiffs in Australia than the general Australian law. To widen the scope of arrest would be to increase the gap even further. But the fact that ordinary plaintiffs may have greater difficulty in bringing foreign defendants to court and obtaining execution seems irrelevant. It is no reason not to improve the position of maritime plaintiffs if this can otherwise be shown to be desirable and internationally acceptable. The current position was developed largely by English courts in a very ad hoc, and even to some extent acci­ dental, way.99 Although long-standing, it does not follow that the position serves Aus­ tralia’s interests. Both the 1952 Arrest Convention and the variety displayed by recent overseas legislation show that an Australian assertion of wider powers of arrest would not necessarily be treated as an exorbitant assertion of jurisdiction. Reflecting the fact that Australia is a nation of shippers, not shipowners, the power of arrest should, it can be argued, be as wide as possible consistent with fairness to shipowners.100

130. Action In Rem in All Cases Irrespective o f Owner’s Liability. Option (b) would allow an action to be commenced against the wrongdoing ship under all heads of admiralty jur­ isdiction where the relevant person has some connection with the ship, whether as its owner, charterer of whatever type, operator or as a person lawfully in possession or con­ trol of the ship at the time the action is commenced. The 1952 Arrest Convention art 3 gives this result if the English text is relied upon, if art 7 (which prescribes the courts with jurisdiction to deal with the merits) is treated as irrelevant in the common law context

where jurisdiction derives from arrest, and if ‘arrest’ is given its normal admiralty oper­ ation, that is, giving jurisdiction to the arresting court to try the merits.101 It is the option least favourable to shipowners and correspondingly most favourable to shippers and those dealing with ships. In this regard it might be thought most suited to Australian in­ terests. The main reason for not adopting it would be that it was thought unfair on the shipowner, or (and perhaps this is merely stating the same point another way) that it may be internationally unacceptable. It is relevant here to consider English developments.

Under the 1956 Act the wrongdoing ship could be arrested ‘if at the time when the action is brought it is beneficially owned as respects all the shares therein’ by the relevant per­

95. (1974) 131 CLR 1,6. 96. Two situations need to be distinguished. The first is where a lien comes into existence despite the fact that the owner of the ship would not be liable in personam with respect to the events which gave rise to the lien. Bottomry is a classic example but see Thomas (1980) para 14 for other (admittedly rare) examples.

The second situation is where the owner was personally liable at the time when the lien came into exist­ ence but the ship has since been sold. The lien survives despite the new owner’s lack of in personam lia­ bility. This situation is far more common. 97. Supreme Court Act 1981 (UK) s 21. 98. See para 94. 99. See the historical introduction in para 9-17. 100. See para 91-6. 101. Strictly it is service on the res. not arrest, that confers jurisdiction, although they frequently occur at the same time. The Convention, however, is concerned with ‘arrest’ in the English text, 'saisie conservatoire’ in the French text.

Maritime Liens and Statutory Rights o f Action In Rem / 99

son.102 The main uncertainty in interpreting this was whether ‘beneficially owned’ could be stretched to include demise charterers.103 This uncertainty was resolved in the 1981 Act by explicitly allowing arrest of the wrongdoing ship where the demise charterer is the rel­ evant person. As originally drafted the Bill would have followed the 1952 Arrest Conven­ tion and allowed the arrest of the wrongdoing ship on all types of admiralty claim. But

Lord Diplock objected, on behalf of the General Council of Shipping, the British Mari­ time Law Association and the P & I clubs, that such a change was both out of place in a consolidating measure and, more importantly, represented a significant change in British

commercial policy.104 A further objection was that, while maritime liens have only a short lifespan, the claims underlying the extended powers of arrest were mostly simple contract debts subject to ordinary limitation of actions time bars. Unless special provision was made they would last for six years. In the face of this opposition the clause was redrafted.

Of the reasons advanced by Lord Diplock, the point that most maritime claims could have a longer life-span (6 years before becoming time-barred) than full maritime liens is certainly relevant to Australia. Perhaps this is only a major concern if all claims are al­ lowed to survive so as to allow arrest in rem despite a change in ownership of the wrong­ doing vessel. In any event the argument depends on what general provision should be made for time limitations, a matter which is considered in chapter 12.

131. Action In Rem on Owner’s and Demise Charterer's Liabilities. Option (c) would al­ low an action to be commenced against the wrongdoing ship where either the owner or the charterer by demise is the relevant person.105 This option would provide (from Aus­ tralia’s point of view) a valuable extension to the present right of action in rem, given the position of demise charterers as persons effectively in control of the ship. One difficulty with it is explaining why the extension should apply only to demise charterers. The prob­

lem of, for example, the supplier of necessaries, can arise with time charterers as well as demise charterers.106 Historically, it was sometimes possible to stretch the term ‘owner’ to include demise charterer, when interpreting the term ‘owner’ in statutes such as the Mer­ chant Shipping Act 1894 (UK) in the context of limitation of liability (s 502-9)107 1 0 8 or ‘ben­ eficially owned’ in the Administration of Justice Act 1956 (UK) s 3(4)(a).10S Hence there has been a tendency to emphasise the ways in which a demise charterer, because he has

legal possession of the ship, is similar to an ‘owner’ and in a legally different position to other charterers.109 But statute has long overtaken this process in the context of limitation

102. Administration of Justice Act 1956 (UK) s 3(4). 103. The better view was that it could not: I Congreso del Partido [1978] QB 500, 537-42 (Goff J); The Father Thames [1979] 2 Lloyd’s Rep 364, 368 (Sheen J); The Pangakalan Susu; The Permina 3001 [1977] 2 MLJ 129 (Singapore CA); The Union Darwin [1983] HKLR 248. For the opposing view, which had the advan­

tage of bringing English law into accord with at least the first paragraph of art 3(4) of the 1952 Arrest Convention, see The Andrea Ursula [1973] QB 265 (Brandon J). 104. Great Britain, 418 Pari Debs (HL) (5th Series) (26 March 1981) 1307-9. For critical comment, see Jackson (1982) 241-2. 105. This is the position under the Supreme Court Act 1981 (UK) s 21(4)(i) and the Admiralty Act 1973 (NZ)

s 5(2)(b).

106. I Congreso del Partido [1978] QB 500, 541-2 (Goff J). See also the Zelling Report, Supp, para 2.4. 107. Sir John Jackson Ltd v The Owners o f the S S Blanche [1908] AC 126. Even before the final appeal was de­ cided the Merchant Shipping Act 1906 (UK) s 71 had provided that s 502-9 of the principal Act were ‘to be read so that the word “owner” shall be deemed to include any charterer to whom the ship is demised.' 108. See the cases referred to in para 130, n 103. 109. On these differences see Gilmore & Black (1975) 239. In civil law systems the demise charter is in a differ­

ent legal form to time or voyage charters. But cf para 127, n 94.

100 / Civil Admiralty Jurisdiction

actions110 and it is difficult to find relevant analogies in other contexts.111 The fact that some overseas legislation continues to draw a distinction between demise and other char­ terers for the purposes of arrest might be thought not to be a sufficient reason for Aus­ tralia to do likewise, especially when such a distinction is not made in the 1952 Arrest Convention.

132. Action In Rem in Some Cases Only. A further option would be to permit an action in rem to be commenced against the wrongdoing ship without reference to the identity of the relevant person but only in respect of certain heads of admiralty jurisdiction. The question would arise which heads of jurisdiction are to be selected. The choices made by the Federal Court Act 1970 (Can) s 43(3) exhibit no clear rationale. To the extent that they go beyond maritime liens, the heads chosen seem to be either proprietary claims (for example, disputes between owners and co-owners as to ownership; disputes in respect of mortgages112) which are acknowledged as a separate category anyway, or to reflect the in­ terests of governments rather than private plaintiff's (pilotage, port, harbour dues, canal tolls and other charges113). Only the head relating to the claims in respect of general av­ erage114 appears to benefit the private plaintiff. Perhaps a more defensible basis of choice would be to distinguish between those claims which arose from consensual dealing with the ship and those that did not. A personal injury claim would give a right of arrest with­ out regard to the identity of the relevant person. Because the tortious relationship be­ tween plaintiff and ship is non-consensual the question whether the plaintiff knew that the ship was on charter seems irrelevant. But a claim for the supply of necessaries would only permit arrest where the party who requested the necessaries was the owner of the ship or someone acting on the owner’s behalf. This would prevent what might be thought to be the unjust situation of the supplier who deals with someone who is known to have no authority to deal on the credit of the ship115 being able nonetheless to look to the ship and its owner for recovery. But this tort/contract dichotomy is inexact: the plaintiff may be able to elect how the cause of action is to be framed. The dichotomy has caused diffi­ culties in the United States both in its common law and subsequent statutory forms. If the supplier of necessaries must have actual knowledge of the authority of the charterer to rely on the credit of the ship there is no incentive to enquire and the test is arguably too harsh on shipowners. If the supplier of necessaries is required to inquire diligently as to

110. See the International Convention Relating to the Limitation of Liability of Owners of Sea-Going Ships, Brussels, 10 October 1957, art 6(2) (owner includes charterer, manager or operator), given effect in Aus­ tralia by the Navigation Act 1912 (Cth), s 333. See also the International Convention on Limitation of Liability for Maritime Claims, London, 19 November 1976 (IMCO Doc No 77.04.E) art 2 (‘The term “shipowner" shall mean the owner, charterer, manager and operator of a seagoing ship’). But cf the pos­ ition in the United States (under 46 USC 186) where still only the owner or demise charterer is allowed to limit: In re Barracuda Tanker Corp 281 F Supp 228 (1968), remanded on other grounds 409 F 2d 1013 (1969). 111. The Navigation Act 1912 (Cth) at present refers directly to demise charterers only in s 6 (definitions of

‘Commonwealth ship', ‘Government ship’) and s 265A (liability of ‘charterers or other persons’ for collis­ ions, loss and damage). On the other hand s 6(4) provides that: Unless the contrary intention appears, a reference in this Act (except in Division 3 or 4 of Part VII) to the owner of a ship shall, in the case of a ship that is operated by a person other than the owner, be

read as including a reference to the operator. Pt VII Div 3 & 4 are concerned with salvage claims and procedure, where the extension is (because of the salvage lien) probably not necessary anyway. 112. Federal Court Act 1970 (Can), s 22(2)(a)-(c).

113. id, s 22(2)(1) and (s). 114. id, s 22(2)(q). 115. Owners often go to great lengths to ensure that those dealing with a ship know that it is on charter and the charterer is not authorised to deal on the credit of the ship. See eg The Loon Chong [1982] 1 M LJ 212,

214, where the charterparty required the charterer to exhibit on board the ship in a conspicuous place a prominent notice to the effect that the ship was the property of the lessor and that neither the lessee nor the master had any right, power or authority to create, incur or permit to be imposed upon the ship any liens whatsoever except for crew’s wages and salvage.

Maritime Liens and Statutory Rights o f Action In Rem / 101

the authority of the charterer the test is arguably too harsh. In the United States at least, striking a balance between the two positions has proven difficult.116 133. Action In Rem on Charterer’s Liabilities while Charter Subsists. The fifth option is to allow an action in rem to be brought against the wrongdoing ship in respect of claims

for which the charterer, not the owner, is the relevant person only during the currency of the charter.117 Although none of the overseas laws considered in this Report employs this option there is a limited precedent. The Merchant Shipping (Stevedores and Trimmers) Act 1911 (UK) s 2 allowed ships to be arrested on claims with respect to the loading and

unloading of ships where the charterer by demise was the relevant person ‘provided that no ship shall be detained on a claim against the charterers of the ship after the expiration of the term for which the ship was demised to them’.118 The main advantage of this op­

tion is that it would only allow an action to be brought in respect of a charterer’s liabili­ ties against the wrongdoing ship while the charterer had at least some financial interest in that ship. In principle, it can be argued, the appropriate place to draw the line is where

the charterer has a stake. To the extent that this option allows charterers to be reached through arrest of the ship it does so at a time when the owner is best placed to pass on any loss suffered in the process to the charterer. The chance of the burden of liabilities in­ curred by the charterer remaining with the owner is reduced, though by how much will

vary widely from case to case.

Evaluation of the Arguments

134. The Effect of an Extended Right of Action In Rem. Underlying any extension be­ yond existing maritime liens of the ability to arrest the wrongdoing ship where its owner is not the relevant person is a pragmatic argument, which to some extent provides a ra­ tionale for maritime liens themselves. For a person dealing with a ship, the identity of the relevant person may be difficult to discover. If it is discovered that the charterer rather than the owner is the relevant person, this person may be difficult to locate, or may be in

a distant country, thereby creating difficulties in effecting service in personam. Even if the plaintiff succeeds in obtaining judgment, assets against which to execute may prove elu­ sive or non-existent. It is easier if the plaintiff can serve and arrest the ship and execute against it or the security put up to secure release. In some situations this security will be put up by a charterer, whose financial stake in the ship sailing on schedule may well be greater than the owner’s. In other situations it will be the owner (or the owner’s P & I

club) who will be compelled for commercial reasons to put up the security even though the charterer is the relevant person. This is arguably an efficient solution. The prudent owner will be aware of the identity and location of the relevant person and will be pro­

tected by means of an indemnity clause in the charter-party.119 Under this the charterer will be obliged to reimburse the owner for costs incurred where the charterer is the rel­ evant person with respect to arrest. If the charterer is a $2 company, the owner will be protected by guarantees, perhaps from the principals behind the company. Therefore, the

argument goes, allowing arrest of the wrongdoing vessel will always ensure that the ha­

ll 6. See Gilmore & Black (1975) 668-88 for details. 117. This option could be combined with either of the two previous options, ie, it could apply only to demise charters (option c) or only to certain heads of jurisdiction (option d). Other combinations are also pos­ sible. 118. The Canada Shipping Act 1934 (Can) s 702(7) makes similar provision, and is still in force. The Shipping

and Seamen Act 1952 (NZ) s 486 allowed stevedoring claims against a ship in respect of any sum due 'from the owners or other persons responsible for the navigation and management of a ship' to be pur­ sued 'as if the claim were a claim for necessaries supplied to the ship". This provision was repealed by the Admiralty Act 1973 (NZ) s 14(3). 119. Zelling Report, Supp, para 27; The Father Thames [1979] 2 Lloyd's Rep 364, 368, (Sheen J).

102 / Civil Admiralty Jurisdiction

bility ends up either directly or indirectly where it belongs. This argument is difficult to evaluate. In some cases it will no doubt provide a just and convenient solution. But this will by no means always be so. For example, Lord Diplock has suggested that the owner cannot insure against the risk that the charterer will not honour the indemnity clause.120 There may be a chain of charterers and sub-charterers between the owner and the rel­ evant person. The situation created by a change of ownership does not seem to be ade­ quately catered for by a rule which allows the arrest of the wrongdoing ship irrespective of the identity of the relevant person. It is possible to have a corollary to the basic rule under which the right of arrest does not survive the change in ownership of the wrongdo­ ing vessel.121 Alternatively, the basic argument can simply be extended. The new owner simply extracts an indemnity from the old.122 The chain of indemnities becomes longer but still brings home liability to the relevant person. But the longer the chain, the less likely it is in practice that it will remain effective. In practice complex chains of charters and sub-charters of various types are not uncommon. Even where there is only an owner- demise charterer link, the latter may, if the charter is almost over, or a frustrating event has occurred, have little practical incentive to put up security. From the owner’s point of view, wider ability to arrest has the effect of making the owner a guarantor of whoever may be the relevant person on the particular claim, up to the value of the owner’s interest in the ship.123 In some situations at least the owner could argue that this merely encour­ ages commercial irresponsibility on the part of those dealing with the ship. For example, suppliers of stores or fuel to ships should, it can be argued, be able to protect their inter­ ests adequately through such available commercial options as insisting on payment in ad­ vance, use of letters of credit or obtaining bank guarantees. They should have a duty to enquire as to the identity of the party with whom they are dealing. On this view they do not need and should not have recourse to the wrongdoing vessel where the relevant per­ son is only a charterer.124

135. Views Expressed to the Commission. A wide range of views was expressed to the Commission on these arguments and in response to the tentative view expressed in the Commission’s consultative papers in favour of the broad right of action in rem (option b)

120. Great Britain, 418 Pari Debs (HL) 5th Series) (26 March 1981) 1309. 121. On the distinction in English admiralty law between maritime liens and ‘statutory liens’ see Thomas (1980) para 44-51. But other solutions are possible. Under Greek maritime law, for example, ‘in cases when the vessel is the only asset of the shipowning company and is transferred to a new owner who

knows that the ship was the only asset of the previous owner, the vessel may be arrested in the hands of the new owner for claims against his predecessor even though such claims are not covered by a maritime lien, which in any event follows the ship under certain conditions': GJ Timagenis, ‘Arrest of Ships in Greece’ [1984] LM CLQ 90, 92. See also the comparative surveys in Jackson (1985) App 5; Tetley (1985)

Part IX.

122. The Father Thames [1979] 2 Lloyd's Rep 364, 368 (Sheen J). See also The Monica S [1968] P 741, 769 (Brandon J) discussing the argument that a new owner is unfairly burdened by the maritime liens on the ship which came into existence prior to the date of purchase: A purchaser always has to reckon with the possibility of maritime liens, and under many foreign laws

all or most of the claims which in England only give a right of action in rem give rise to such liens ... In practice a purchaser takes an indemnity from his seller against claims which attached prior to the sale, and, unless the seller becomes insolvent, this affords adequate protection. For a case involving the interpretation of the indemnity clause in a common form agreement for the sale of a ship see Athens Cape Naviera SA v Deutsche Dampfschiffarts GeseUschaft Hansa' AG. The Barenbets [1985] 1 Lloyd’s Rep 528 (CA). 123. See eg The Vestland [1980] 2 Lloyd’s Rep 171. This involved a simple owner-time charterer relationship.

The owner had great difficulty in recovering from the time charterer the cost of posting security to obtain the release of its vessel which had been arrested on claims for which the charterer was the relevant per­ son. 124. cf Shell Oil Co Ltd v The Ship Lastrigoni (1974) 131 CLR 1.

Maritime Liens and Statutory Rights o f Action In Rem / 103

described in para 130.125 There was a general agreement that a right of action in rem should exist where the relevant person is, when the action is commenced, either the own­ er or the demise charterer of the ship in question. Beyond that there was no consensus. The Australian Shippers’ Council commented:

It is unsatisfactory that at present a ship may only be arrested where its owner is the relevant person, except where claims give rise to maritime liens ... [A] wider power of arrest is de­ sirable, redressing any present imbalance between the rights of the shipowners and rights of a person dealing with a ship. ... A higher degree of self-policing within the industry would be en­

couraged by provision for claims against a charterer or owner(s) or persons in control of the ship at the time the proceeding was commenced.*26

Similarly S Westgarth was unconvinced that the claims of ship owning interests that Australia will be economically dis­ advantaged by the adoption of such a jurisdiction will, in fact occur. There may be cases where it is difficult to determine whether a charterer is a time or demise charterer and the ap­

propriate evidence to the effect that the charterer is a demise charterer may be equivocal. It seems to me that there is little difference in principle between extending the ability to arrest in respect of demise charterers and extending that ability in respect of time charterers. For these reasons it seems to me that it would be appropriate for the Commission to consider extending the jurisdiction to arrest in respect of time charterers’ debts.127

On the other hand, strong views to the contrary were also expressed. The Chairman of Universal Shipbrokers (Aust) Pty Ltd commented that the proposal would tend to en­ courage exports to be shipped from Australia on fob rather than cif terms, to Australia’s disadvantage:

should legislation as proposed go through international shipowners will be faced with trying to obtain open ended Bank Guarantees from Australian Charterers to cover any possible mis­ demeanours and this will cost a lot of money. Exporters who feel that they are unable to ob­

tain such wide guarantees will of necessity have to fall back on shipping FOB thus the Char­ terer of the ship will be the receiver of the goods in another country and a shipbroker in an­ other country acting on behalf of the receiver will earn brokerage in US Dollars that was once paid to an Australian company. [W]e have many examples to hand ... that when a market falls

and the contract is an FOB purchase all that has to be done is not send the ships to collect the goods. The legalities of obtaining redress from buyers in another country seem to us far more onerous than that of a stevedore or agent not having the wit or commercial acumen to obtain payment for his services in advance for duties to be performed for a voyage or time charter­ er.128

The need for an extended right of arrest was also questioned.

1 am not aware of any substantial class of case in which an action in rem would not be avail­ able were the right to be limited [to owners and demise charterers]. Reference is frequently made to ‘operators’ of ships as a class in respect of whom a right in rem should exist. In my experience, such persons are invariably the agents of the owners or demise charterers, as is any ‘person in lawful possession or control’ of a vessel who is not himself an owner or demise charterer. ... [A] supplier of bunkers or services at the instance of a time or voyage charterer

125. Australian Law Reform Commission, Discussion Paper 21, Admiralty Jurisdiction, 1984, para 16; Austral­ ian Law Reform Commission, Admiralty Research Paper 1, S Curran & D Cremean, An Australian Ad­ miralty Act: The Ambit o f Admiralty Jurisdiction, (1984) 140. 126. MR Blair, President, Australian Shippers' Council, Submission 28 (19 February 1985) 2-3. 127. S Westgarth, Westgarth Baldick, Submission 55 (1 November 1985) 2. Other submissions supporting a

broader right of arrest included P Foss, Submisson J (4 May 1983) 3; Professor DC Jackson, Submission 25 (14 February 1985) 3; WM Ross, National Bulk Commodities Group, Submission 82 (18 April 1986). Similar views were expressed at the Commission’s public meetings on the Reference held in Brisbane and Perth (see para 4) and by the Commonwealth Department of Trade. 128. AB Willings, Chairman, Universal Shipbrokers (Aust) Pty Ltd, Submission 32 (6 March 1985) 2.

104 / Civil Admiralty Jurisdiction

has other means of protection available to him and there do not seem to be sufficient grounds for extending the right to proceed in rem against the vessel to such a case.129 136. Recommendation. As these views suggest, the matter involves a basic question of trade or transport policy for Australia, and one on which different views can reasonably be held. The Commission has concluded that, on balance, it is not desirable at the present stage to go beyond the generally accepted scope of the statutory right of action in rem in comparable countries. The justification for admiralty jurisdiction, as a universal jurisdic­ tion dependent only on local service of process on the res, depends on its broad interna­ tional acceptance. Admiralty jurisdiction, as an exception to a basic principle of territori­ ality, is clearly in Australia’s interests.130 There would be little justification for relying on the international consensus supporting admiralty for one purpose and to reject it for an­

other, closely related one. It is true that the Brussels Convention can be construed as al­ lowing arrest on a maritime claim without reference to in personam liability. But, apart from the question whether this is the better interpretation of art 3 and 7, having regard to the French text of the Convention131, the Convention has not been taken to this extent in countries such as the United Kingdom, Canada, Singapore or New Zealand. Moreover, at the Lisbon meeting of the Comite Maritime International in 1985 which produced a draft revision of the Arrest Convention, there was finally very substantial support — after strong earlier disagreements on this issue — on a text which limits the right of arrest to liabilities of owners and demise charterers.132 Jurisdictions such as Singapore, Hong Kong, New Zealand, South Africa133 and Canada134 have not extended the right of action in rem to any greater extent. The provisions of the Supreme Court Act 1981 (UK) which provide for an action in rem with respect to demise charterers’ liabilities have been said to be working well and resolving most difficulties.135 For these reasons a statutory right of action in rem with respect to any claim, other than a claim directly involving the possess­ ion of or a proprietary interest in the ship136, should only be able to be brought where, when the action is commenced, the owner or a demise charterer of the ship is a relevant person in respect of the claim. In accordance with the view expressed in para 80 and 127, a provision to this effect will not present constitutional difficulties under s 76(iii), since, even if the narrower ‘procedural’ view of s 76(iii) were to be taken, the liability in ques­ tion would be the liability of a person with a proprietary interest (that is, as owner or de­ mise charterer) in the ship at the relevant time. The enforcement by an action in rem of

129. PG Willis, Deputy Corporate Solicitor, BHP Co, Submission 23 (12 February 1985) 3-5. Other sub­ missions opposing a right o f action in rem extending beyond owners’ and demise charterers’ liabilities in­ cluded: S Hetherington, Ebsworth & Ebsworth, Submission 31 (1 March 1985) 3-5; Justice B Sheen, Sub­ mission 38 (21 M arch/2 May 1985); B Davenport QC, Law Commission for England and Wales, Sub­ mission 77(19 March 1985); Australian Mining Industry Council, Submission 86 (13 May 1986). This view also had a considerable measure of support at the public meetings held in Sydney and Melbourne (see para 4). 130. See para 88-9, 94, 96. 131. The French text refers to ‘saisie conservatoire' rather than arrest. This is a quite separate concept. See para

130.

132. CMI Draft Convention, 1985, art 3(1 )(d), (3). The text of art 3(1 )(d) was adopted by 23-6 (with 5 absten­ tions): PG Willis, Submission 80(15 April 1986). 133. According to the principal architect of the South African Act, it may be possible to bring proceedings in rem under it in respect of a demise charterer’s liability, on the old common law basis that a demise char­

terer is owner pro hoc vice: D Shaw QC, Submission 39 (25 March 1985) 2. Alternatively it may be possible under South African law to attach the demise charterer’s right to possession by attaching the ship ad fundandam jurisdictionem: ibid. 134. Apparently there is no proposal at present to extend the right of action in rem under Canadian law to de­

mise charterers’ liabilities generally: PM Troop, Canadian Department of Justice, Submission 40 (26 March 1985). 135. Justice B Sheen, Submission 38 (21 M arch/2 May 1985). 136. For these ‘proprietary’ claims, where an interest in the ship itself is at stake, see para 149-52. It is ac­

cepted that no nexus requirement needs to be spelt out in these cases. The owner may, eg, be arresting the ship after wrongful dispossession. See also para 192, 208.

Maritime Liens and Statutory Rights o f Action In Rem / 105

this liability can properly be described as procedural, having regard to the history of ad­ miralty jurisdiction.

137. An Alternative View: Time Charterers Operating Ships. If this recommendation is not accepted, on the ground that a wider right of action in rem is desirable in Australia’s interests, then it would be within the admittedly broad and flexible international consen­ sus on the scope of admiralty, as well as within the scope of Commonwealth power under s 76(iii) of the Constitution, to provide for a right of action in rem with respect to the lia­ bilities of any person who is the operator of the ship (including a time charterer who is the operator). A compromise proposal to this effect gained some support at the Lisbon CMI Conference.137 Equating ship owners and operators for this purpose would also be consistent with s 6(4) of the Navigation Act 1912 (Cth) and with provisions in a number of maritime conventions.138 If this course is adopted, it may be desirable to impose a rela­ tively short time limit (such as 12 months) for service of process after the commencement

of proceedings, to avoid unnecessarily affecting third parties where the time charterer as relevant person has ceased to be the operator of the ship.139

Lifting the Corporate Veil

138. The Present Position. One method of resolving some of the difficulties referred to in para 127 in identifying the relevant person in respect of a maritime claim would be to en­ act a special provision treating related companies or entities as the same person for this purpose. A similar question arises with respect to the identification of ‘sister’ ships or sur­

rogate ships, for example, where a group of ‘one-ship’ companies is effectively under the control of a holding company.140 In its Report on the Review of the Law of Admiralty the South African Law Commission took the view that, in determining whether the owner­ ship of the surrogate vessel was in the hands of the relevant person, a court should be

able to lift the corporate veil. The Commission argued that since the drafting of Brussels Convention, ... its provisions have been defeated by the proliferation of ‘one ship companies’, that is to say, companies owning only one ship and therefore avoiding the Convention. The extension is, it is

thought, a logical extension of the Convention ,..141

The Convention itself describes as the prerequisite linkage to determine common owner­ ship ‘when all the shares therein are owned by the same person or persons’ (art 3(2)). ‘Shares’ refers to shares in the ship itself, not merely in the company which owns the ship.142 Therefore, if the ‘relevant person’ is company X, a wholly owned subsidiary of

company Y, a ship owned by Y (or by Z, another company wholly owned by Y) cannot be arrested on a claim against X. In England the question of lifting the corporate veil in order to arrest a ship has arisen in two situations. The first arises because a statutory right

to proceed in rem against the wrongdoing ship does not survive a change in ownership. It has been argued that the court should disregard a change in ownership where the new

137. It was proposed as a compromise by P Willis (Australia) and was defeated only by 15-11 (5 abstentions): PG Willis, Deputy Corporate Solicitor, BHP Ltd, Submission SO (15 April 1986). 138. See para 131 η 110. 139. cf P Foss, Submission 3 (4 May 1983) 3; S Westgarth, Submission 55 (1 November 1985) 2.

140. On the question whether surrogate ship arrest should be introduced in Australia see ch 10. 141. South African Law Commission, Report on the Review o f the Law o f Admiralty, 1982, para 7.3. See now Admiralty Jurisdiction Regulation Act 1983 (SAf) s 3(7). 142. Robinson SK, ‘Arresting the Misconception’ [1982] LMCLQ 261, 262.

106 / Civil Admiralty Jurisdiction

owner is a company forming part of the same group as the old owner.143 The other situa­ tion concerns the arrest of a ship owned by a subsidiary of the company which was the relevant person.144 Both questions have had to be resolved by interpreting the relevant provisions of the legislation then in force, the Administration of Justice Act 1956 (UK). This Act used the expression ‘beneficially owned’145 and similar language is used by its

successor, the Supreme Court Act 1981 (UK).146 It has caused some judicial puzzlement. As Justice Brandon observed, ‘trusts of ships, express or implied are ... rare’.147 It is un­ necessary to cater for them in the proposed legislation.148 In the event the English courts declined to interpret the expression as a mandate for any general lifting of the corporate veil beyond situations of trusteeship or nominee holdings.149 Justice Sheen said that he ‘would not hesitate to lift that veil if the evidence suggested that it obscured from view a mask of fraud rather than the true face of the corporation’.150 But merely because a ship­ ping group chose to operate through a number of one ship companies was, in his view, insufficient reason. If, when the plaintiffs agreed to charter the wrongdoing ship, they had been concerned about the assets of its owners, they would or could have found out that the ship they were now seeking to arrest was not part of those assets. In The Maritime

Trader Justice Sheen implied that a sham might be found to exist if the one ship company had been set up solely to defraud the plaintiff.151 But as a critic of his decision has pointed out, the ‘one ship company is a widespread maritime institution with sound other commercial reasons behind it: proving its use with the specific intention of evading s 3(4) would be a quite exceptional feat’.152 As the general reluctance to lift the corporate veil in Australia is at least as great as it is in England153, it may be assumed that similar deci­

143. The Aventicum [1978] 1 Lloyd's Rep 184; The Helene Roth [1980] 2 WLR 549, 554; The Enfield [1982] 2 MLJ 106. The facts in The Aventicum provide a good example of how complex the chain of interlocking companies involved in the ownership of a commercial vessel can be. See para 139 n 158. 144. The Maritime Trader [1981] 2 Lloyd’s Rep 153. 145. s 3(4)(a)-(b). 146. s 21(4)(i)-(ii) (‘beneficial owner’). 147. The Andrea Ursula [1973] QB 265, 269. See also The Pangakalan Susu; The Permina 3001 [1977] 2 MLJ

129 (Singapore CA) (attempt by plaintiff to argue that a constructive trust had arisen out of a ship financ­ ing arrangement failed). Under the Shipping Registration Act 1981 (Cth) s 46, notice of trusts shall not be entered in the Register. Under s 47 however, equities may be enforced. See also Navigation Act 1912 (Cth) s 391 (beneficial owners of ships subject to penalties imposed by Act on registered owners). 148. As Robinson (1982) 263 points out, if the expression ‘beneficial owner’ in the Supreme Court Act 1981

(UK) s 21(4) was interpreted strictly, ‘the present information which is in practice laid before the court in order to obtain a warrant for arrest is not in compliance with the requirements laid down by the 1981 Act.’ 149. The Aventicum [1978] 1 Lloyd’s Rep 184; The Maritime Trader [ 1981 ] 2 Lloyd’s Rep 153; The Saudi Prince [1982] 2 Lloyd’s Rep 255. The decision in The Asean Promoter [ 1982] 2 MLJ 108 (Singapore S Ct) illus­ trates the limits of the courts’ willingness to lift the corporate veil under the general law. Plaintiffs claim arose in connection with ship AP. The relevant person was its registered owner M & G Ltd which had a paid up capital of 2 SI shares, both of which were owned by HPI Ltd. All directors of M & G were direc­ tors of HPI. The ship it was sought to arrest, APS, was owned by SML Ltd who acted as managers of the the wrongdoing ship, AP. The Court ‘had no hesitation in lifting the veil of incorporation’ between M & G Ltd and HPI Ltd on the basis of the former’s undercapitalisation and the common directorships. How­ ever it refused to do likewise with the veil between HPI Ltd and SML Ltd and thus would not allow the arrest of APS. 150. The Maritime Trader [ 1981] 2 Lloyd’s Rep 153, 159. 151. ibid. But cf his remarks in The Helene Roth [1980] 2 WLR 549, 554. For examples of lifting the veil see

The Saudi Prince [1982] 2 Lloyd's Rep 255, 260 (shares in ship-owning company put in the names of chil­ dren, father treated as beneficial owner); The Enfield [1982] 2 MLJ 106 (Singapore CA) (purported sale of ship between two companies owned by same family disregarded). On the other side of the line see eg The Loon Chong [ 1982] 1 MLJ 212 (Malaysia, Fed Ct, Full Ct). 152. Tettenborn AM ‘The Time Charterer, the One-Ship Company and the Sister-Ship Action in rem' [1981]

LMCLQ 507, 509. GW Keeton, ‘Lessons of the Torrey Canyon: English Law Aspects’ (1968) 21 Current Legal Problems 94, 110 asserts that one ship companies were a direct reaction to the introduction in 1956 of surrogate ship arrest. 153. HAJ Ford, Principles o f Company Law 3rd edn, Butterworths, Sydney, 1982, para 711.

Maritime Liens and Statutory Rights o f Action In Rem / 107

sions will be reached in admiralty here unless the proposed legislation clearly directs otherwise.

139. Arguments About Lifting the Corporate Veil. The arguments for and against a spe­ cial provision in the proposed legislation should be briefly summarised. There are quite powerful arguments for leaving questions of lifting the corporate veil to be determined by general Australian company law. The first is the desirability of retaining harmony and consistency with that law. It can be argued that the issue has no particular or peculiar

maritime aspect, but is a general issue raised by the ability to set up corporate bodies. This being so, the problem should be dealt with as a matter of general law, not of admir­ alty jurisdiction. Arguably, the general law at present strikes the appropriate balance in

leaving the corporate veil intact, cases of fraud apart. Secondly, allowing the veil to be lifted in admiralty has the potential to complicate further what is already a highly com­ plicated matter.154 Even further complications would occur when there is an insolvency in admiralty involving some or all of the same assets as a corporate insolvency under gener­

al law.155 Third, there is no overseas precedent for any general lifting of the corporate veil in regard to the arrest of ships, with the sole exception of the Admiralty Jurisdiction Regulation Act 1983 (SAf) s 3(7) (which deals only with the identification of associated ships, and not with the more fundamental question, whose liability allows the arrest of the wrongdoing ship). On the other hand, this point is not necessarily impressive: if the

law is ever to change someone has to be first (or second). A fourth argument is that legis­ lation lifting the corporate veil may be difficult to apply. The South African provision re­ lies on the concept of control: ‘A person shall be deemed to control a company if he has the power, directly or indirectly, to control the company’.156 One might ask how ‘indirect’ the control may be: for example, are the votes of family members within the control of

the senior member of the family? Again it could be said that this point is unimpressive. Even if the outer reaches of the provision are uncertain, it will at least catch the more common situation of a holding company or wholly owned subsidiary. The South African courts appear so far to have been able to apply this aspect of s 3(7)(b)(ii) without undue difficulty.157

154. See eg the added difficulties created for the operation of the time bar in the Navigation Act 1912 (Cth) s 396(3): see para 254. 155. See para 259. 156. Admiralty Jurisdiction Regulation Act 1983 (S AO s 3(7)(b)(ii). 157. On the other hand there have been difficulties both with the question of the retrospective effect of s 3(7)

and with priorities as between associated claims. In Transgroup Shipping SA v Owners o f M V Kvoju Maru 1984 (4) SAf LR 210, Leon J held that the associated ship provisions were merely procedural and there­ fore applied to claims arising before the Act came into force. But he held that the plaintiff had failed to prove that two ships, time chartered tc the defendant company and operated as part of a single fleet, were ‘associated’ with a third ship owned by the company. The plaintiffs solicitor’s affidavit in that case com­ plained that lack of access to share registers of the various companies prevented it proving the ’control' required by s 3(7). The Court declined to allow discovery to assist the plaintiff in proving that the action was properly constituted. In Euromarine Iniernaiional o f Mauren v The Ship Berg 1984 (4) SAf LR 647 the

Natal Provincial Division held (2-1, Leon J dissenting) that the effect of the corporate veil provision was to convert associated ship arrest into a new right instead of merely a new procedure, on the basis that the action could be brought against a ship "owned by an entirely different company from that which owned the ship in respect of which the claim arose’ (id, 659 (Milne JP)). The rights created by s 3(6) & (7) were therefore strictly prospective in effect only. The Kyoju Maru case was, on this point at least, disapproved.

108 / Civil Admiralty Jurisdiction

140. Difficulties o f Application. The principal argument in favour of a special provision for lifting of the corporate veil in admiralty is the pragmatic point that it will assist Aus­ tralian shippers and ship suppliers, in a few cases at least, to recover from foreign ship­ owners. Just how many cases it is difficult to estimate. In order to take out a warrant of arrest in this situation an affidavit will have to be sworn by or on behalf of the plaintiff stating that the ship it is sought to arrest is owned by a company which (assuming for the moment that the South African wording is used) is ‘directly or indirectly’ controlled by or controls the ‘relevant person’. Lloyd’s and similar agencies have a long-standing record of keeping track of both the movement and ownership of vessels. But there is no readily available source by which a solicitor in Australia could easily go behind formal owner­ ship. People who set up elaborate corporate structures through open registry or tax haven countries often do so partly to preserve their anonymity. In any event they are likely to seek to preserve that anonymity.1SS * * 1 5 8 The onus will be on the plaintiff to show that the requisite connection exists, not only to aver in the affidavit, but also to discharge the bur­ den of proof should the owners of the arrested vessel seek to have the writ set aside.159

Because speed may often be of the essence in arresting a ship practical problems are like­ ly to surround attempts to lift the corporate veil. The provision also has the potential to discriminate in its effect against shipowners based in countries where information about shareholdings and corporate structures are public.

141. Conclusion. Again, differing views were expressed to the Commission about the de­ sirability of a corporate veil provision, either confined to the identification of surrogate ships, or applying more generally.160 The predominant view was that a special provision in the legislation was undesirable. It was suggested that the right to proceed in rem with respect to owners’ and demise charterers’ liabilities, combined with the existing law of maritime liens, covered most situations. But the fundamental consideration, in the Com­ mission’s view, is the undesirability of making special provision with respect to the cor­ porate veil in legislation dealing with admiralty jurisdiction. If questions of the liability or indebtedness of corporate groups are to be addressed this is properly done through company or insolvency law rather than in specific legislative contexts such as admiralty

But cf Banque Paribas v Fund o f Sale o f the M V Emerald Transporter 1985 (2) SAf LR 452, on appeal on another point 1985 (4) SAf LR 133. In EE Sharp & Sons Ltd v M V Nefeli (1984) (3) SAf LR 325, King AJ held that common management of two ships did not establish ‘control’, but the fact that the same person was ‘president/director’ of the two companies in question did. In Zygos Corporation v Salen Rederierna AB 1984 (4) SAf LR 444, Friedman J, surprisingly, held that a ship could be arrested as an associated ship notwithstanding that it had ceased to be ‘associated’ after the claim arose and before proceedings were commenced. Gulf OH Trading Co v Fund o f Sale o f M V Emerald Transporter 1985 (4) SAf LR 133 con­ cerned the respective priorities of claims against ‘associated ships’, some of which were owned by the same company and some of which were owned by different companies in the same group. The court re­ jected the literal interpretation of s 11(8) as leading to an absurdity and held that it applied to all associ­

ated ship claims carried into effect by an action in rem. Its effect was to give priority to claims pursued di­ rectly against the ship in question as the wrongdoing ship over all such associated ship claims, which were then ranked inter se without reference to the identity of the relevant person or the question whether they were ‘sister ship' or ‘group ship’ claims. For priorities and surrogate ship arrest see further para 259-61. 158. In The Aventicum [1978] 1 Lloyd’s Rep 184, the companies involved were set up under the laws of Pana­

ma, Liberia, the Bahamas, Singapore, Switzerland and West Germany and at the time of the action the linkages had still not been unscrambled in a manner that made it clear to the court who was ultimately in control. 159. id, 190. 160. Submissions supporting a ‘corporate veil’ provision included MA Hill, Submission 19 (16 January 1985) 3; Justice B Sheen, Submission 22 (29 January 1985) 1 (while expressing concern about conflict with gen­ eral company law principles); MR Blair, President, Australian Shippers’ Council, Submission 25(19 Feb­ ruary 1985) 3. Submissions opposing such a provision included PG Willis, Deputy Corporate Solicitor, BHP, Submission 23 (12 February 1985) 6; WE Paterson QC, Submission 4! (1 April 1985) 3; Australian Mining Industry Council, Submission 86 (13 May 1986). cf AT Scotford, Submission 61 (18 November 1985) 1, drawing attention to reported concern at the South African provision and its possible deterrent effect.

Maritime Liens and Statutory Rights o f Action In Rem / 109

jurisdiction.161 Accordingly there should be no special provision dealing with the corpor­ ate veil, or defining ‘related’ or ‘associated’ companies, in the proposed legislation.162

Relationship between Actions In Rem and In Personam

142. The Need to Preserve Admiralty Actions In Personam. As pointed out in para 88, the ability to proceed in rem is the key feature of admiralty jurisdiction. It is perhaps not immediately clear why there should be any facility in admiralty to sue in personam. The rules for service outside the jurisdiction in such an action are the same as the general

rules of court, so that obtaining jurisdiction over a foreign defendant is no easier. Unlike the action in rem, the admiralty action in personam confers no security interest in the de­ fendant’s property pending judgment. Nor can any question of priorities arise: in a pro­ ceeding in admiralty commenced in personam there is no res in the hands of the court

whose proceeds have to be distributed amongst competing claimants. Historically the ac­ tion in personam was infrequently used even in the pre-19th century period when it in­ volved arresting the defendant.163 The Admiralty Court Act 1861 (UK) s 35 expressly al­ lowed all the jurisdiction conferred by the Act to be exercised either in rem or in per­

sonam.'64 Clearly this was not intended to revive the arrest of persons; instead it brought about the development of the modern admiralty action in personam.'65 Admiralty pro­ ceedings in personam are in most respects similar to general Supreme Court actions. They begin by personal service of originating process on a named defendant. They culminate in a judgment which, if in the plaintiffs favour, allows execution against the property of the defendant. It is important to distinguish this type of proceeding from the anomalous type of proceeding variously described as ‘a quasi action in personam"66 or an action

‘para-in-remV67 This latter is numerically the most common type of action in modern ad­ miralty jurisdiction. It results when the writ of summons in rem is served on the defend­ ant res owner personally or on the owner’s local representative. No writ of arrest is ever executed because the defendant has given an undertaking to appear backed by an accept­ able form of guarantee. Although begun by a writ in rem there is never at any stage any

res in the custody of the court. Whatever the juristic difficulties with this procedure, it is a well accepted one which should clearly be retained. The question here, however, is whether a distinct in personam admiralty jurisdiction should be retained. It is clear that it should be so retained, for several reasons. Some advantages of in personam petitions in admiralty are procedural. For example, in an action for collision damage, whether in per­

sonam or in rem, preliminary acts have normally to be produced.168 Limitation actions can only be commenced in personam yet there may be cases where the shipowner needs to commence a limitation action before the anticipated proceedings in rem have been commenced.169 Proceedings for apportionment of salvage can only be commenced in per­

161. The same conclusion was reached in the context of a proposal for a "group insolvency' regime, and for the same reason, by the Cork Committee: GB, Report of the Review Committee, Insolvency Law and Practice. HMSO, London, 1982, para 1950-2. 162. As the South African cases referred to in n 157 suggest, such a provision might require the support of a

substantive legislative power, presumably s 51(20). 163. Wiswall (1970) 16, 179. On the fall into disuse of arrest in personam in admiralty in the 18th century see 77ie Clara (1855) Swab 1; 166 ER 980. 164. See now Supreme Court Act 1981 (UK) s 21(1)— (4); Federal Court Act 1970 (Can) s 43(1 )-(2); Admiralty

Act 1973 (NZ) s 3(1); Admiralty Jurisdiction Regulation Act 1983 (S Af) s 3(I)— (4). 165. See Wiswall (1970) 62-4 on the transition, the precise nature and details of which appear to have been confusing to contemporaries and remain obscure for historians. 166. Thomas (1980) para 66.

167. Wiswall (1970) 197. 168. See para 295-7 for discussion of preliminary acts. 169. See para 176, 299.

1 1 0 / Civil Admiralty Jurisdiction

sonam, yet it may be useful if they can be brought in admiralty. Some of the substantive law administered in admiralty is unique to admiralty. For example, it is far from clear whether, in the absence of a salvage agreement, a salvage claim could be effectively pur­ sued in personam in a court not having admiralty jurisdiction.170 Yet there seems to be no virtue in requiring all salvage actions to be brought in rem. Admiralty actions cannot be brought in rem against the Crown171 so the ability to sue in personam is the only means of suing the Crown in admiralty. There are other jurisdictional advantages, especially in a country such as Australia where admiralty jurisdiction will be federal jurisdiction.172 1 7 3 As these examples show, in personam admiralty jurisdiction serves useful functions. It should be conferred in the proposed legislation.

143. Effect of Appearance. It was established in The Dictator173 in 1892 that judgment given in a proceeding in rem could be personally enforced against a defendant who had appeared in the proceeding, irrespective of the value of the res. Thus the effect of appear­ ance is to convert the proceedings into a combined form of in rem and in personam ac­ tion. This was not the case in the pre-Judicature Act period, when the Admiralty court was a separate court with no access to ordinary in personam actions commenced by per­ sonal service, and in the United States in rem liability remains completely distinct from in personam liability.174 However the rule is a convenient one, which avoids the need for

multiplicity of proceedings.175 Curiously, it seems never to have been decided that ap­ pearance does not give rise to a judgment enforceable in personam where someone other than the relevant person (that is, the person who would be liable in an action in per­ sonam) appears, yet it is clear that this must be the rule.176 It is desirable to spell out in the proposed legislation both the rule about the in personam liability of a relevant person who has appeared as a defendant, and the absence of any in personam liability for the

payment of money (other than by way of costs) of a person who has appeared in the pro­ ceeding but is not a relevant person.177 144. Separate Actions? Although an in rem action can give rise to in personam liability, there remain important substantive and procedural differences between actions in per­ sonam and actions in rem. To take one example, it is not possible to serve a writ in rem outside the jurisdiction, whereas a writ or other initiating process in personam will often need to be so served. To avoid confusing the two kinds of proceeding, it is necessary to stipulate in the proposed legislation178 that an action in rem in respect of a particular claim is to be commenced by a separate writ and not joined with an action in personam on the same claim in the same originating process.179

170. Kennedy's Civil Salvage, 4th edn, KC McGuffie (ed), Stevens, London, 1958, 372-4 canvasses the issue. Because the salvage does not constitute a debt, recovery at common law would only be available if there was a contract, express or implied. If recovery were based on quantum meruit it is not clear that the amount recovered would reflect the admiralty practice of encouraging salvors by making liberal and gen­ erous awards. Navigation Act 1912 (Cth) s 318-28 covers most, but not all cases: cf para 45. 171. Navigation Act 1912 (Cth) s 405A. See para 199.

172. See ch 11 for discussion of federal jurisdictional issues. 173. [1892] P 304. See also The Gemma [ 1899] P 285. 174. See Wiswall (1970) 158-62, 174-8, 180-4, 198-201 for an advocate's account o f the old admiralty rule and its displacement in The Dictator [ 1892] P 304. 175. The Privy Council in The August 8 [1983] AC 450, 456 described it as 'this important principle'. 176. Appearance is a submission to jurisdiction, not to liability: ibid, cf Jackson (1985) 84. The point is impli­

cit in Caltex Oil (Aust) Ply Ltd v The Dredge ' Willemstad'(1976) 11 ALR 227, 231-3 (Gibbs J). 177. The rule should refer only to liability for the payment of money, leaving open the question of the effect of equitable orders (eg injunctions). See further para 245-8. 178. Specifically, in the proposed uniform Admiralty Rules. See ch 14 on the need for and content of such

rules.

179. See now Rules of the Supreme Court (UK) O 75 r 3(1) & (2). The earlier UK practice of issuing ‘com­ bined’ writs was disapproved by a Practice Direction in 1979: [1979] 2 All ER 155; Rules of the Supreme Court (UK) Admiralty Practice Direction 2A.

The Scope o f Statutory Rights o f Action In Rem /111

9. The Scope of

Statutory Rights of Action In R em

General Considerations

145. Introduction. This chapter deals with the question which types of claims (apart from claims in respect of maritime liens) may be brought in admiralty jurisdiction. One of the aims in setting out specific heads of admiralty jurisdiction is to gather together pro­ visions at present scattered through a number of 19th century Imperial Acts. Another aim is to extend existing heads, and (where necessary) to add new heads to bring admiralty jurisdiction into line with Australian interests and requirements, viewed in the light of

international acceptability as indicated by legislation in comparable jurisdictions. The question whether and to what extent the proposed legislation should provide for jurisdic­ tion over maritime liens was discussed in chapter 8.1 But admiralty jurisdiction in England has long covered more than merely claims giving rise to maritime liens. The

1952 Arrest Convention sets out 17 categories of subject matter which give rise to a ‘mari­ time claim’.2 The United Kingdom legislation has 18 categories3, Canada and New Zea­ land 194, and South Africa 26.5 From the 1952 Arrest Convention and this overseas legis­ lation a common core can be extracted. The categories which make up the core are set

out in the following section, with a brief discussion of each category. Simply from the fact of their commonality it can be safely assumed that these categories should be in­ cluded in the proposed Australian jurisdiction. The discussion therefore focuses more on the precise formulation of each category, noting variations in the overseas texts and pos­ sible reasons for them (para 149-71). The next section then discusses heads of jurisdic­

tion found only in some of the overseas models, and other possible categories which might be included in the proposed legislation (para 172— 92). Separate consideration is given to the need for a provision dealing with ancillary jurisdiction or providing for a ‘re­ sidual’ jurisdiction over any other matters historically within admiralty (para 193-5). A

final section discusses the question what limitations there should be on the admiralty jur­ isdiction so defined, by reference to particular classes of defendant (for example the Crown, local residents) (para 196-200).

146. Overlap Between Heads o f Jurisdiction. In interpreting the heads of admiralty juris­ diction in English legislation the courts give the words used ‘their ordinary wide mean­ ing’.6 It can be assumed that Australian courts will interpret the proposed provisions in the same broad way. The various heads of jurisdiction are to be interpreted disjunctively:

it is no objection that a claim brought under one head might also fit under another head. Indeed there is a large degree of overlap between the heads of jurisdiction in all the over­ seas legislation. Major areas of overlap and redundancy are indicated as each head is dis­

1. See para 121-3. 2. International Convention for the Unification of Certain Rules relating to the Arrest of Sea-Going Ships, Brussels, 10 May 1952, art l(l)(a)-(q). 3. Supreme Court Act 1981 (UK) s 20(2)(a)-(s). 4. Federal Court Act 1970 (Can) s 22(2)(a)-(s); Admiralty Act 1973 (NZ) s 4( I )(a)-(s).

5. Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(a)-(z). 6. The Eschersheim [1976] 1 All ER 920, 926 (Lord Diplock). See also The Saint Anna [1983] 1 Lloyd's Rep 637, 639 (Sheen J); The Antonis P Lemos [1985] AC 711.

112 / Civil Admiralty Jurisdiction

cussed. Unless a particular provision is completely redundant, such overlap does no harm and ensures that the heads of jurisdiction proposed are broadly similar in number and wording to the overseas legislation. 147. Two Classes of Arrest? Under present Australian law, claims can only be brought

in admiralty on some types of subject matter where the ship is already under arrest.7 The apparent rationale for such a requirement is that some claims are insufficiently important or lack adequate connection with the forum to warrant the arrest of a ship, but nonethe­ less should be able to be brought against a ship which has already been arrested on an­ other type of claim. Since claims for small amounts of money can be brought under other heads of jurisdiction, this rationale is not persuasive. No ‘second class’ heads of jurisdic­ tion of this sort are included in the proposed jurisdiction. Where the reason for the ‘sec­ ond class’ status is the possible lack of sufficient nexus with the forum, the doctrine of forum non conveniens will be available in a proper case. It may be that some types of

claim are too trivial to justify arrest. But in practice there does not appear to be any problem of arrest on trivial claims in other jurisdictions where the restrictions which now exist in Australia have been abolished. Courts already have the ability, through imposing costs, to discourage unnecessary arrests on trivial claims, and the question whether fur­ ther procedural restrictions should be imposed is discussed in chapter 14.8

148. Geographical Restrictions. A final general consideration is whether there should be any geographical restrictions built into the subject matter of admiralty jurisdiction. For most types of subject matter the exclusion of causes of action arising within the body of a county was ended in the 19th century.9 But restrictions still remain on some maritime contracts and torts.10 These restrictions should be removed.'1 No similar restriction needs to be placed on any new heads of jurisdiction created by the proposed legislation. The re­ strictions already proposed for inland waters claims12, and the exclusion of inland water­

ways vessels from the definition of ‘ship’13, are together sufficient to avoid problems aris­ ing.

Proposed Heads of Jurisdiction — Statutory Rights of Action In Rem

149. Vessel Ownership and Title Disputes. All the overseas Acts contain very similar wording in describing this head of jurisdiction. Similar provision should be made for Australia, covering claims to ‘title to, or ownership or possession of, a ship or a share in a ship’.14 It should be made clear that the jurisdiction is not restricted to Australian-

registered ships.15 At present the power to order rectification of the register under the

7. See para 39 (foreign mortgages), 40 (construction, repair, equipping of ship). 8. See para 300 (caveats against arrest), 301-4 (damages for vexatious arrest). 9. See para II.

10. See para 48, 49. See also para 42. 11. This involves, among other things, the repeal of 13 Ric II St 1, c 5 and 15 Ric II c 3. See para 9 on these Acts, and see further para 271. 12. See para 115. 13. See para 106. 14. The Canadian Supreme Court has rejected the view expressed by the Federal Court based on decisions of

admiralty courts in the United States that the equivalent language in the F.ederal Court Act 1970 (Can) s 22(2)(a) should be construed as covering only petitory and possessory actions. It looked instead to Eng­ lish decisions and treated the Federal Court’s admiralty jurisdiction under s 22(2)(a) as extending to awards of damages and orders of specific performance in actions for breach of contract to sell a ship: Aniares Shipping Corp v The Ship Capricorn' (1980) 111 DLR (3d) 289. But note that the 1952 Arrest Con­ vention art 1 (1 )(o) refers only to title and ownership, not possession. Hence Greek courts, for example, have interpreted this as not covering (and hence not allowing arrest on) a vendor’s claim arising out of the sale of a ship: KD Kerameus, ‘Admiralty Jurisdiction in Continental Countries' (1983) 8 ML 329, 336. 15. cf Supreme Court Act 1981 (UK) s 20(7)(a). See also para 298.

The Scope o f Statutory Rights o f Action In Rem / 113

Shipping Registration Act 1981 (Cth) s 5916 is vested only in State and Territory Supreme Courts. The same power should be expressly vested in any other superior court exercising original jurisdiction.17

150. Disputes Between Co-owners o f Ships. Some issues of co-ownership will be capable of being brought under the previous head, as disputes as to the ownership of a share in a ship. There should also be provision to cover in addition disputes relating to the employ­ ment and earnings of a ship, including actions for restraint or possession.18 There is no reason to limit the jurisdiction to disputes involving Australian-registered ships, as the re­ moval of a similar restriction in England in 195619 would suggest. A provision should be added along the lines of s 20(4) of the Supreme Court Act 1981 (UK), so that jurisdiction under this head will include power ‘to settle any account outstanding and unsettled be­ tween the parties in relation to the ship, and to direct that the ship, or any share thereof, shall be sold, and to make such other order as the court thinks fit’.20

151. Mortgages. All the overseas texts make explicit provision for mortgages, and all ex­ cept the 1952 Arrest Convention couple ‘mortgage’ with ‘charge’. This is further elaborat­ ed (in all but the South African Act) by providing that claims in respect of mortgages and charges apply ‘to all mortgages or charges, whether registered or not and whether legal or

equitable, including mortgages and charges created under foreign law’.21 Australian legis­ lation should be in similar terms, so as to remove the restriction with respect to foreign mortgages which presently exists in Australia.22 Apart from the provision just quoted, ‘charge’ is not defined. However, English courts have resisted any inclination to interpret

it expansively; it ‘relates to a charge in the nature of a mortgage, and would not cover a charge or lien for wages’.23 Nor would it, on this view, extend to charges created by the foreign equivalent of statutes such as the Protection of the Sea (Civil Liability) Act 1981 (Cth) s 21 in respect of clean-up costs following oil pollution from the ship. It is prefer­

able to deal with such matters specifically rather than to stretch the meaning of ‘charge’ in a provision dealing primarily with mortgages. The 1952 Arrest Convention and the Canadian and South African Acts all refer to ‘hypothecation’ as well as ‘mortgage or

charge’. Hypothecation is in most respects the functional equivalent in civil law to mort­ gage in the common law, though its legal characteristics are rather different.24 The pro­ vision already recommended to the effect that foreign mortgages and charges be included within the head of jurisdiction sufficiently suggests that functional equivalents are not ex­

cluded. Explicit reference to ‘hypothecation’ and ‘pledge’ is useful both to underline this and to make clear that ‘charge’ is used in a ejusdem generis manner rather than broadly. In The Camosun the Privy Council observed that the provisions in the Admiralty Court Acts of 1840 and 1861 giving admiralty jurisdiction over mortgages ‘seemed to be con­

16. For the admiralty jurisdiction under the Administration of Justice Act 1956 (UK) s 1(1 )(a) to make dec­ larations as to ownership and as to entitlement to registration see The Bineta [1966] 3 All ER 1007. For the inherent jurisdiction of admiralty and other superior courts to order rectification of registers see The Rose (1873) LR 4 A & E 6; Brand v Broomhall[\W l) 1 KB 571. 17. In ch 11 it is recommended that the Federal Court be given concurrent original admiralty jurisdiction.

The power to order rectification would also be vested in inferior courts, under the provision recom­ mended in para 195, in the rare case where the exercise of that power is an 'associated matter'. 18. See para 47. 19. Administration of Justice Act 1956 (UK) s 1(1 )(b), l(4)(a). cf Supreme Court of Judicature (Consolida­

tion) Act 1925 (UK) s 22(l)(a)(ii). 20. Supreme Court Act 1981 (UK) s 20(4). See similarly Admiralty Act 1973 (NZ) s 4(3). 21. Administration of Justice Act 1956 (UK) s l(4)(c); Supreme Court Act 1981 (UK) s20(7)(c); Federal Court Act 1970 (Can) s 22(3)(d); Admiralty Act 1973 (NZ) s 4(4)(c). 22. See para 39. 23. The Acrux [1965] P 391,403 (Hewson J). See also The Sr Merriel [1963] P 247; The Monica S [ 1968] P 741,

747.

24. See The Colorado [1923] P 102.

1 1 4 / Civil Admiralty Jurisdiction

fined to claims by mortgagees’.25 This dictum would be equally applicable to the current English admiralty jurisdiction26 2 7 which merely repeats the language of the earlier legisla­ tion. Though not stated by the Privy Council, the reason for the limitation appears to be

that set out in general terms in The Eschersheim 27, that is, the need for the ship arrested to be the same ship as that in respect of which the claim arose. This requirement was dis­ cussed and accepted in chapter 828, and there is no reason to depart from that general conclusion in the particular case of mortgages. It is not clear why a mortgagor would ever want to proceed in rem. On the other hand the restriction flows from the prerequi­ sites for an action in rem, and not from the language of the head of jurisdiction dealing with mortgages. Accordingly in personam claims by mortgagors would be within admir­ alty jurisdiction. It is possible to mortgage or charge cargo or freight29 and the proposed legislation should give jurisdiction to admiralty over disputes involving such mortgages.

152. Effect of Shipping Registration Act (1981) (Cth). The Shipping Registration Act 1981 (Cth) s 94A at present confers admiralty jurisdiction over Australian-registered mort­ gages.30 On passage of the proposed legislation s 94A will become redundant and can be repealed. Section 41 of the Act deals with a mortgagee’s power of sale. In some circum­ stances a second or subsequent mortgagee is required to obtain an ‘order of a court of competent jurisdiction’ before exercising a power of sale. The proposed provision for mortgages would make any court exercising jurisdiction under it ‘competent’ for the pur­ poses of granting such an order. No special provision is necessary. In contrast, s 47B and 47C of the Act give to State and Territory Supreme Courts jurisdiction with respect to the caveat system associated with the Shipping Register. Special provision would be needed if admiralty courts are to have this jurisdiction. Similarly s 66 of the Act allows a mortga­ gee who is notified by the Registrar that the ship which is the security for the mortgage is no longer entitled to be registered to apply to ‘the Supreme Court of a State or Territory’ for any of a variety of orders including an order for the sale of the ship. It might be thought appropriate that applications for orders under s 66 should be able to be made to any court exercising admiralty jurisdiction. On the other hand, s 66 proceedings are in the nature of execution pursuant to a court order; there are none of the characteristics of arrest in rem whereby jurisdiction over a possibly foreign defendant is asserted and se­ curity for any resulting judgment is obtained. With one exception there seems to be no need to alter the jurisdictional provisions of the Shipping Registration Act 1981 (Cth). Under the proposals in chapter 11, the courts given jurisdiction under the Act will also have admiralty jurisdiction. If a matter arises involving both the Act and admiralty it can be brought in those courts and a complete remedy obtained in the one proceeding. In the case of the Federal Court (which, as proposed in chapter 11, will also have original ad­ miralty jurisdiction) it will usually be sufficient to rely on the power over ‘associated’ fed­ eral matters given by the Federal Court of Australia Act 1976 (Cth) s 32.31 Section 66(6)(b) also empowers a court to make ‘such other orders for and in relation to the dis­ tribution of the proceeds of sale as it thinks fit’. It is not clear how distribution under this provision would operate in a court exercising admiralty jurisdiction. Would admiralty rules on the distribution of proceeds of the sale of the res (including rules on priorities) apply? If so, the distribution might, depending on the facts, be different to a distribution made by a court not exercising admiralty jurisdiction. This would open up the possibility

25. Bow. McLachlan ά Co Ltd v The Ship Camosun [1909] AC 599, 609. 26. Supreme Court Act 1981 (UK) s 20(2)(c). 27. [1976] 1 All ER 920, 927 (Lord Diplock). 28. See para 125-6. 29. For cases involving mortgages of freight see Keith v Burrows (1876) 1 CPD 722; The Zigurds [1934] AC

209. Respondentia is a specialised example of such a mortgage. 30. See para 39 for the background to s 94A. 31. See further para 195.

The Scope o f Statutory Rights o f Action In Rem / 115

of forum shopping by the mortgagee. In chapter 12 the overlap between general distribu­ tion on insolvency and bankruptcy and the special admiralty rules is discussed. The con­ clusion there is that it is unnecessary to make any provision to deal with this overlap in the proposed legislation.32 The same would appear to be true of the potential conflict created by s 66(6)(b) of the 1981 Act. The exception relates to s 59 of the Act, which gives Supreme Courts power to rectify the register. This power will commonly be used in con­ nection with proprietary maritime claims in admiralty, and express power should be con­ ferred on the Federal Court to order rectification of the register.

153. Towage. The 1952 Arrest Convention art l(l)(i) allows jurisdiction over claims for ‘towage*. The overseas legislation refers to ‘any claim in the nature of towage’.33 The lat­ ter, broader, wording is to be preferred, as it makes it clear that claims in respect of es­ corting services by tugs are within admiralty even though no actual towage is performed or, emergencies apart, expressly contemplated.34 In The Conoco Britannia it was said to be arguable whether admiralty jurisdiction under this head included a claim by a tugboat

operator for an indemnity from the owner of the towed ship in respect of the tugboat op­ erator’s liabilities to the tugboat owner.35 3 6 Under the reasoning in The Eschersheim 36 the only ship (apart from any provision on surrogate ships) which could be served or arrested under this head as worded in the Supreme Court Act 1981 (UK) s 20(2)(k) is the ship being towed. If the owner of the tow wishes to proceed in rem against the tugboat, some other head of jurisdiction must be relied upon. A contract for the ‘use or hire of a ship’37 is the obvious one. Because towing is almost invariably under contract other heads will be available and expansion of this head of jurisdiction so as to allow the owner of the tow to sue in rem under it is unnecessary.

154. Pilotage. Most pilotage in Australia is conducted by State governments through various Harbour Boards and Marine Boards.38 Statutes making provision for pilotage often make provision for collection of pilotage charges39, including in some cases allow­ ing for the detention of the vessel.40 A head of jurisdiction relating to pilotage is not es­ sential. But it will give an additional avenue of recovery, and will also allow claims for

pilotage services performed abroad to be recovered. It should therefore be available.

155. Salvage. There are two major areas of uncertainty to be resolved. First, there is the problem of the overlap41 between the present admiralty jurisdiction and the salvage juris­ diction (including life salvage) conferred by the Navigation Act 1912 (Cth). Secondly, there is the question whether the description ‘claim in the nature of salvage’42 is broad enough, in particular, problems have arisen with claims for negligently performed sal­ vage operations. On the first point, one option would be simply to continue the overlap.

It has been in existence in its present form since the enactment of the Navigation Act

32. See para 258. 33. eg Supreme Court Act 1981 (UK) s 20(2)(k). 34. The Leoborg [1962] 2 Lloyd's Rep 146. 35. [1972] 2 QB 543, 552. It was unnecessary to resolve the point. Counsel for the defendant had argued that,

because the claim was neither for remuneration nor for an incident which occurred while the tug was ac­ tually towing, it fell outside the towage head of jurisdiction. 36. [1976] 1 All ER 920, 927 (Lord Diplock); see para 124-5. 37. See para 169. See also para 171 (services supplied to a ship). 38. GK Green, The Law o f Pilotage. Lloyd's of London Press, London, 1977, 80-1 provides a convenient

State-by-State summary. 39. eg Pilotage Act 1971 (NSW) s 34; Queensland Marine Act 1958 (Qld) s 178; Harbours Act 1936 (SA) s 133. 40. eg Queensland Marine Act 1958 (Qld) s 245. See para 263-6 for the relationship between admiralty arrest

and statutory rights of detention. 41. See para 45. 42. Supreme Court Act 1981 (UK) s 20(2)(j).

116 / Civil Admiralty Jurisdiction

1912 (Cth) and appears to have caused no difficulty in practice.43 On the other hand, it is, to put it mildly, conceptually untidy. A second option would be to remove the salvage jurisdiction provisions from the Navigation Act 1912 (Cth)44 and require all salvage claims to be brought in admiralty. This would be acceptable if admiralty jurisdiction was

conferred on courts of summary jurisdiction in the same way as at present under the Navigation and Merchant Shipping Acts. Although these Acts impose uniform money and venue limits on salvage actions45, there seems to be no advantage in forcing into Su­

preme Courts matters which at present can be heard in lower courts. In chapter 11 it is recommended that lower courts be given admiralty jurisdiction in personam, subject to their ordinary limits on size of claim and venue, and this principle should apply to sal­ vage as to other maritime claims. This would still leave salvage law split between three Acts. The Navigation Act and the Merchant Shipping Act would continue to deal with the substantive law of salvage, conflict of laws46 and the powers and functions of the re­ ceiver of wreck in respect of salvage47, while the proposed legislation would deal with jur­ isdiction of courts and related matters. A third option would be to have no salvage pro­ vision in the proposed legislation, leaving the whole topic to the Navigation Act and, to the extent that it still applies, the Merchant Shipping Act 1894 (UK). But it is unsatisfac­ tory to propose an Act dealing with admiralty jurisdiction which contains no reference to salvage. The fact that most salvage claims give rise to maritime liens underlines the in­ congruity. In the absence of a thorough reform of the substantive law of salvage there can be no ideal solution. But the second option is the most appropriate, pending a com­ plete overhaul of the Navigation Act and repeal of the Merchant Shipping Act.48

156. Scope o f Salvage Jurisdiction. Turning to the second issue, what matters connected with salvage should fall within the scope of the proposed provision, the Navigation Act 1912 (Cth) s 328 grants jurisdiction in ‘all claims whatsoever relating to salvage’. Most of the overseas legislation uses the phrase ‘claim in the nature of salvage’. In England it is unclear whether this latter wording

embraces the totality of questions and claims which may arise within the province of salvage or whether it has a more limited connotation. It is probable that the phrase ‘any claim in the nature of salvage’ bears a restricted meaning and is confined to a claim for a salvage award arising from beneficial service. Given the format adopted under the Administration of Justice Act 1956, section 1, and in particular the ‘sweeping-up’ jurisdiction clause, it seems unneces­ sary to give the phrase a more extended and strained construction. Thus the court’s jurisdic­ tion over matters ancillary to a claim for salvage such as its power to apportion an award, or its power to abate or extinguish an award or condemn a salvor in costs upon evidence of neg­ ligence or misconduct, and which were established under the original jurisdiction, is expressly retained by the Admiralty Court by virtue of the ‘sweeping-up’ clause. The same is equally the

43. See the cases cited in para 45 n 7 1. 44. ie s 318-320, 322,326, 328. 45. The Summers Report, 168 recommended that the uniform limits in s 318 and 320 be abolished and that the ordinary money limits of the courts in question be applied.

46. Navigation Act 1912 (Cth) s 327. 47. id, s 323, 325. 48. cf para 62.

The Scope o f Statutory Rights o f Action In Rem / 117

case with regard to the court’s jurisdiction to order contribution or to grant an injunction to protect any possessory interest a salvor may enjoy.49 It is recommended below that the proposed legislation contain no ‘sweeping-up’ clause.50 Quite apart from that recommendation, it is undesirable to rely on a sweeping-up clause to pick up matters which presently fall within the admiralty jurisdiction under the rubric of ‘salvage’. Accordingly the broader language of the Navigation Act 1912 (Cth) s 328 is to be preferred.51 This definition will cover claims for life salvage.52 The broader defini­ tion will raise the question whether it will be possible to proceed in rem under the salvage head for a claim for negligently performed salvage. Under the United Kingdom legisla­ tion the answer is no, not because of the way in which the head of jurisdiction is worded but because of the general requirement, explained in The Eschersheim 53, that the res against which the claim is brought must be the res in respect of which the claim arose. In a claim for negligently performed salvage the owner of the res involved (the salved prop­ erty) appears as plaintiff. In most cases where there is a salvage agreement the plaintiff can sue in rem under the head of jurisdiction ‘agreement for the use or hire of a ship’.54 It seems that today most major salvage operations are contractual, but even in the absence of an agreement it may be possible to sue in rem for negligent salvage where, for ex­ ample, the negligence resulted in a collision between the salving and the salved vessels.55 But there will be some very rare situations in which it will be impossible to proceed in rem against the negligent salvor.56 The South African legislation expands the head of jur­ isdiction to include ‘any claim by any person having a right in respect of property salved or which would but for the negligence or default of the salvor or would-be salvor, have been salved’.57 It is not clear whether such a claim could be pursued in rem under this provision. One one view it could not because the wording makes no reference to a ship and thus fails to identify the ship which may be arrested: only jurisdiction in personam is conferred. On another view the negligent salvage claim could be pursued in rem against any ship which the negligent salvor happens to own; no specific nexus between the negli­

49. Thomas (1980) para 252. See also G Brice, The Maritime Law o f Salvage, Stevens, London, 1983, para 493. In The Tesaba [1982] 1 Lloyd’s Rep 397, the owners of a salved ship were sued in rem by the salvors alleging that the owners’ release of the cargo aboard without first obtaining security from the cargo owners for the salvage claim was a breach of the salvage agreement. Sheen J stated (id, 400):

To my mind it is clear beyond doubt that the plaintiffs’ claim is not a claim in the nature of salvage for two main reasons. Firstly, the plaintiffs’ claim is for damages and is not for a salvage reward. Second­ ly, the claim endorsed on the writ is a claim for damages for breach of one of the obligations of the salvage agreement, which breach did not occur until after the termination of the salvage services. On the requirement for a temporal relationship between the facts giving rise to the cause of action and the salvage, see also McAllister Towing & Salvage Ltd v General Security Insurance Co o f Canada [1982] 2

FC 34 in which the Federal Court held that a dispute between a salvor and an insurance company which undertook to pay salvage in the amount to be determined by arbitration in exchange for the salvor im­ mediately releasing the salved cargo was not a salvage dispute within the meaning of the Federal Court Act 1970 (Can) s 22(2)(j) because it arose from facts which took place a long time after the salvage. 50. See para 193. 51. A narrower definition of salvage is required in the context of implementing the limitation of action pro­

vision of the 1910 Brussels Salvage Convention: see para 254. 52. See Navigation Act 1912 (Cth) s 315 (salvage for saving life). 53. [1976] I All ER 920, 927 (Lord Diplock) discussed above para 124-5. The particular application of this general reasoning to the salvage head of jurisdiction was not discussed in the House of Lords. For dis­

cussion in that case in the courts below see [1974] 3 All ER 307, 319 (Brandon J); [1976] 1 All ER 441, 446 (Cairns LJ) 456, 458 (Sir Gordon Willmer). 54. As was permitted in The Eschersheim [1976] I All ER 920. 55. This appears to be the way in which the action was brought in The St Blane [1974] 1 Lloyd’s Rep 557, but

the report does not make clear either the head of jurisdiction under which the claim was brought or even whether it was brought in rem or in personam. 56. See eg the facts in The Tojo Maru [1972] AC 242 in which it was held (for the purpose of limitation of lia­ bility, not admiralty jurisdiction) that the negligent act was not done either in the management of the sal­

vage tug or on board that tug. 57. Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(j).

118 / Civil Admiralty Jurisdiction

gent act and the ship would have to be shown. A middle view would allow arrest only of the ship (if any) used in the act of negligent salvage. This is the view most consistent with the nexus requirements discussed above.58 But it still leaves unclear what sort of connec­ tion is required between the salvor’s vessel and the negligent act. Most cases of damage in which a ship is ‘used’ would appear to fall within other heads of jurisdiction.59 Accord­ ingly there is no need for a specific head of jurisdiction dealing with negligent salvage.60

157. Liability Salvage. It would also be premature to make any express provision for the controversial topic of ‘liability salvage’.61 If that concept becomes part of the substantive Australian law of salvage, that will be the appropriate time to add jurisdiction over ‘lia­ bility salvage’ claims to the admiralty jurisdiction. It should be noted that the salvage head of jurisdiction is not intended to deal with wreck other than salvage claims in re­ spect of wreck. Other aspects of wreck arise under the head of jurisdiction dealing with droits of Admiralty.62

158. General Average. As defined by the Marine Insurance Act 1909 (Cth) s 72(2) ‘there is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the prop­ erty imperilled [normally a ship or cargo] in the common adventure’. Broadly, claims for general average may involve shipowners suing owners of surviving cargo for contribu­ tion, or owners of lost or damaged cargo suing either the shipowner or other cargo own­ ers (or both).63 Admiralty jurisdiction in Australia does not at present include general av­ erage. The Admiralty Court in the 19th century disclaimed any such jurisdiction64 except when a general average claim was made against a fund in the custody of the court.65 The reason for disclaiming jurisdiction seems to have been partly deference to tradition but also ‘that in all cases of average it is essential that the tribunal which is to adjust it should have the power to compel all the parties interested to come in and pay their quota. I pos­ sess no such power’.66 Although the Admiralty Court acquired increased powers in

186167, it was not until 1956 that admiralty jurisdiction was conferred by statute over ‘any claim arising out of an act which is or is claimed to be a general average act’.68 It would seem that the provision was inserted in order to conform to the 1952 Arrest Convention. There do not appear to have been any difficulties caused by the earlier lack of jurisdic­ tion over general average and the necessity for such a provision does not seem to be marked.69 Goods are normally carried on board ship under contract and another head of jurisdiction is available to cover contract disputes.70 Even in the absence of a contract an

58. See para 125-6. 59. See especially para 165 (damage done by a ship), 166, 181-4 (damage or loss in the operation of a ship for which the owner &c is liable). 60. Similar reasoning applies to the tort of interference with salvage rights, which does not fall within the UK

salvage head of jurisdiction: The Tubantia [1924] P 78. See para 181. 61. For a survey of the concept and the controversy which surrounds it see B Sheen, ‘Conventions on Sal­ vage’ (1983) 57 Tulane LR 1387, 1404-9. 62. See para 178. 63. See generally Lowndes & R udolf on the Law o f GeneraI Average and the York-Antwerp Rules, 10th edn, J

Donaldson and others (eds), Stevens, London, 1975, para 463-4. 64. La Constancia (1846) 2 W Rob 487; 166 ER 839; The North Star( 1860) Lush 45; 167 ER 24. 65. Cargo ex Galam f 1863) Br & L 167; 167 ER 327. 66. La Constancia (1846) 2 W Rob 487; 166 ER 839, 841 (Dr Lushington). 67. Admiralty Court Act 1861 (UK) s 14, 15. 68. Administration of Justice Act 1956 (UK) s 1(1 )(q). 69. McGuffie (1964, 1975) para 44 notes that a plaintiff seeking to recover a general average contribution may

well choose to proceed in the commercial list rather than admiralty. In the United States ‘general average claims may be asserted in ordinary civil actions, where the process of shoregoing courts is adequate to deal with them, but today what little litigation there is on this subject is mostly carried on in the admiralty court’: Gilmore & Black (1975) 270. 70. eg Supreme Court Act 1981 (UK) s 20(2)(h) (agreement relating to carriage of goods in a ship); see also

Union o f India v EB Aaby's Rederi A /S [ 1975] AC 797.

The Scope o f Statutory Rights o f Action In Rem / 119

admiralty tort provision would often be adequate to give jurisdiction.71 But some gaps may remain, particularly under the tort provision where it is the shipowner who is plain­ tiff and cargo owners the defendants.72 There seems no reason not to follow the 1952 Ar­ rest Convention and all the overseas legislation, and include general average as a head of jurisdiction.

159. Wages o f Masters and Crew Members. In devising a suitable provision for admir­ alty jurisdiction over wages the main concerns are to ensure that the wording used en­ ables courts to continue their broad interpretation of who is, in the earlier terminology, a ‘seaman’, to determine who is allowed to sue on behalf of the seaman, and to define what constitutes ‘wages’ (including the status of the 19th century rule that wages must be earned aboard ship). In resolving these matters it is important to ensure that the proposed jurisdiction harmonises with the provisions of other Commonwealth and State legislation

which deal with the same subject matter.

160. Definition o f Master and Crew Members. The definition of master causes no diffi­ culty: the definition used in the Navigation Act 1912 (Cth) s 6 should be used.73 The defi­ nition of ‘seaman’ in the context of admiralty jurisdiction is less straightforward because many people work aboard ships (some only while the ship is in port) who play no direct part in the navigation or operation of the ship. The Navigation Act 1912 (Cth) s 6 defines ‘seaman’ as

a person employed or engaged in any capacity on board a ship on the business of the ship, other than — (a) the master of the ship; (b) a pilot; (c) an apprentice; or (d) a person temporarily employed on the ship in port.74

This is not coextensive with the definition applied in the context of admiralty jurisdiction. For example, apprentices are included in the Admiralty Court’s jurisdiction over sea­ men’s wages.75 Admiralty also treated as a seaman a person who was employed as a care­ taker on a ship in port.76 It is not clear whether such a person would be excluded by

para (d) of the Navigation Act definition. On the other hand the breadth of the opening part of this definition parallels the broad view taken in admiralty. Cooks77, pursers and surgeons78 and carpenters79 have all been treated as seamen in suits for seamen’s wages. There are three options. The first is to adopt the Navigation Act definition but to omit para (c) of that definition, thus including apprentices. This may perhaps result in a slight

71. eg Supreme Court Act 1981 (UK) s 20(2)(g) (any claim for loss or damage to goods carried on a ship). 72. In this situation the shipowner would normally refuse to release the cargo until security had been given for the claim. Because the shipowner will have custody of the cargo anyway there would usually be no advantage in proceeding in rem.

73. ‘“ Master” means a person having command or charge of a ship’, cf Supreme Court Act 1981 (UK) s 24(1) which applies, for the purposes of admiralty jurisdiction, the definition of master in the Merchant Ship­ ping Act 1894 (UK). 74. cf the definition in the Merchant Shipping Act 1894 (UK) s 742: ‘“seaman” includes every person (except

masters, pilots and apprentices duly indentured and registered) employed or engaged in any capacity on board any ship’. In R v Judge o f the City o f London Court (1890) 25 QBD 339, it was said that this defini­ tion would undoubtedly include a person such as a stevedore. The question whether stevedores should be

able to bring claims in rem is discussed in para 171. 75. The Albert Crosby (1860) Lush 44; 167 ER 23. 76. The Jane and Matilda (1823) 1 Hagg 187; 166 ER 67. For a dictum that the NSW Vice Admiralty Court had ‘jurisdiction to entertain the claim for wages of a person who is in charge of a vessel while laid up in

harbour’, see The Collaroy (1887) 3 WN (NSW) 97, 97. 77. The Jane and Matilda (1823) 1 Hagg 187; 166 ER 67. 78. The Prince George (1837) 3 Hagg 376; 166 ER 445. 79. The Bulmer{ 1823) 1 Hagg 163; 166 ER 59.

120 / Civil Admiralty Jurisdiction

narrowing of the jurisdiction by omitting caretakers, an omission which seems of little significance. The second option would be to use a term such as ‘seaman’ in the proposed legislation without any definition. This will pick up the earlier case law and allow some flexibility. But it has the corresponding disadvantage of uncertainty and places reliance on early 19th century English cases which are in some respects obscure.80 This seems suf­ ficient reason for not recommending this option. A third option would be to follow the United Kingdom model. The Administration of Justice Act 1956 (UK) substituted ‘mem­ ber of the crew’81 for the use of ‘seaman’ in earlier legislation.82 The other overseas legis­ lation also uses the former expression in preference to ‘seaman’. It has been suggested that ‘member of the crew’ (which is not defined in any of the legislation) may be a nar­ rower concept than ‘seaman’.83 It would perhaps exclude people such as caretakers who are employed on ships in port but do not in any meaningful sense form part of a crew. Any narrowing effect might be seen as useful in limiting the focus of admiralty jurisdic­ tion primarily to the sea-going operations of ships. Given that the differences between the options are marginal, the simplest solution is to adopt the definition in the Navigation Act but to include apprentices within the definition. The expression ‘members of the crew’ should be used rather than ‘seamen’, consistently with the adoption of non-sexist terminology in Commonwealth legislation.

161. Allotment of Wages; Recovery on Behalf of Deceased Crew Members. A second is­ sue is the possible need to draft the head of jurisdiction to cover claims for wages where the master or crew member is not the plaintiff. Two situations in which this occurs are al­ lotment of wages and recovery by the government on behalf of deceased crew members. On the latter point no difficulty occurs because the relevant legislation provides that re­ covery shall be ‘in the same Court and in the same manner as that in which seamen’s wages are recoverable’.84 Under statutory provisions allowing allotment of wages the al­ lottee is given the right to sue for the wages in ordinary courts but no reference is made to courts exercising admiralty jurisdiction.85 The issue is whether such suits should also be brought within admiralty jurisdiction. The effect of doing so would be to allow the allot­ tee to arrest the ship. The 1956 United Kingdom legislation specifically incorporates al­

lotment claims within admiralty jurisdiction.86 However the 1981 Act appears to exclude

80. The question who is a ‘seaman' for admiralty jurisdiction purposes does not seem to have received signifi­ cant discussion in any modern case. 81. s 1(1 )(o). See similarly Supreme Court Act 1981 (UK) s 20(2)(o). 82. Admiralty Court Act 1861 (UK) s 10; Supreme Court of Judicature (Consolidation) Act 1925 (UK)

s22(l)(viii). 83. Thomas (1980) para 327. 84. Navigation Act 1912 (Cth) s 154(1). Seamen’s Act 1898 (NSW) s 68(a) is to the same effect. 85. Navigation Act 1912 (Cth) s 71 referring to ‘a County Court, District Court, or Local Court of any State,

or in a court of summary jurisdiction"; Seamen’s Act 1898 (NSW) s 54(2) referring to the District Court or (for small claims) summary courts, cf Merchant Seamen Act 1935 (Tas) s 4(1), Merchant Shipping Appli­ cation Act 1903 (WA) s 2(1), both incorporating the Merchant Shipping Act 1894 (UK) Pt II, s 143(1) of which allows the allottee to recover ‘in the same court and manner in which the wages of seamen not ex­ ceeding fifty pounds may be recovered under this Act’. This refers to s 165 which bars proceedings for re­ covery of wages not exceeding 50 pounds ‘in any superior court of record ... [or] in any court having Ad­ miralty jurisdiction’ unless the owner is bankrupt, the ship is already under arrest, the claim is referred to such a court by a lower court, or ‘where neither the owner nor the master of the ship is or resides within twenty miles of the place where the seaman or apprentice is discharged or put ashore’. 86. Administration of Justice Act 1956 (UK) s 1 (1 )(o):"... any claim by or in respect of a master or member of

the crew ...’. See also Admiralty Act 1973 (NZ) s4(l)(o); 1952 Arrest Convention art 1(1 )(m).

The Scope o f Statutory Rights o f Action In Rem / 121

such claims.87 Although the point is minor, the exclusion from the proposed head of any jurisdiction which would allow an allottee to arrest a ship is preferable.88

162. Need to Define Wages. A third issue is what may be included within the term ‘wages’ when making a claim for wages within admiralty jurisdiction. The present theo­ retically restrictive requirement that, in order to be wages, the sums must have been earned on board ship has been so generously interpreted as to be virtually meaningless.89

It can safely be omitted from the proposed provision.90 In other respects the policy of the Admiralty has been a recognition of a large number of benefits and allow­ ances which flow under a contract of employment, and which have tended to increase in num­ ber with changing conditions of employment and welfare, as wages. These include conditional

payments; victualling allowances provided for under the contract of employment; profit sharing payments; vacational pay, sick pay and overtime payments; employee and employer pension fund contributions; national health insurance contributions; social benefit contribu­ tions; provident fund contributions; income tax; trade union dues; legal expenses, eg stamp

duty, related to any head of claim.91

It has also been held that, under this head of jurisdiction, admiralty courts can hear claims for damages for breach of a seaman’s contract of employment whether the breach has the effect of terminating the contract92 or leaves it subsisting.93 These cases would no doubt be followed in Australia, but on this point there is some virtue in the legislation being as clear and informative as possible. Accordingly the legislation should specifically

include claims by masters or members of the crew for any sums that a person, as employ­ er, is under an obligation to pay to a person as employee, whether the obligation arose out of the contract of employment or under Australian or foreign law.

163. Relationship to Other Legislation. The Navigation Act 1912 (Cth) s 91 deals with jurisdiction as to wages of masters, seamen, apprentices and, when certain amendments are proclaimed94, workers on self-propelled offshore mobile drilling units. The jurisdic­ tion arises, it would appear, only with respect to a ‘ship’ as defined for the purposes of

the relevant Part of the Act, broadly an Australian registered or owned ship.95 The juris­ diction is given to Supreme Courts, courts having Admiralty jurisdiction and courts hav­ ing civil jurisdiction in respect of the amount of the claim. In addition some State legisla­

87. Supreme Court Act 1981 (UK) s 20(2)(o): ‘any claim by a master or member of the crew of a ship for wages (including any sum allotted out of wages or adjudged by a superintendent to be due by way of wages'. The Federal Court Act 1970 (Can) s 22(2)(o) and the Admiralty Jurisdiction Regulation Act 1983 (S Af) s 1 (1 )(ii)(n) likewise only permit actions by masters and crew for wages, not actions in respect of

their wages. 88. The Summers Report, 65 recommends that the range of people to whom allotments may be made should be extended to include banks and insurance companies. 89. See para 44, n 53. 90. cf Thomas (1980) para 308. 91. id, para 321 (footnotes omitted). 92. See eg The Ferret (1883) 8 App Cas 329 (PC) upholding (on this point) the Vice Admiralty Court of Vic­

toria (1882) 8 VLR (Vice Ad) 1. 93. The Justitia (1887) 12 PD 145; Karamanlis v The Norsland [1971] FC 487. See also the discussion in The Halcyon Skies [1977] QB 14. 94. See para 103, n 33 on these amendments. 95. See s 10 for a precise definition. The definition applies ‘except so far as the contrary intention appears'

but there is little basis for arguing that such an intention was shown in s 91.

122 / Civil Admiralty Jurisdiction

tion deals generally with jurisdiction over wages of seamen and masters.96 There is no reason for admiralty to have exclusive jurisdiction over seamen’s wages, and thus no need in this Reference to recommend alterations to s 91 or similar provisions in other leg­ islation.97 There are also a number of items which can be recovered under statute ‘in the Court and manner in which the wages of seamen may be recovered under this Act’.98 Other provisions in Commonwealth, Imperial and State Acts omit the final three words of the formula.99 These Acts may expand the ambit of the maritime lien for wages, al­ though in the light of the broad definition proposed in para 162 they do not do so to any great extent. No specific recommendation is called for on these provisions.100

164. Disbursements. The rather fragmented statutory underpinning in Australia for the maritime lien for master’s disbursements has already been discussed, as has the proposed provision for its enforcement as a maritime lien.101 This head of jurisdiction will give a parallel statutory right of action in rem to the master. The question is whether a similar statutory right should be allowed in respect of claims for disbursements by a person other than the master. All the overseas Acts allow claims in admiralty jurisdiction for disburse­ ments by shippers, charterers or agents. The 1952 Arrest Convention art 1(1 )(n) and the Admiralty Jurisdiction Regulation Act (SAf) s l(l)(ii)(o) refer to disbursements on ac­ count of a ship or its owner. The remaining Acts refer more narrowly only to disburse­ ments on account of a ship.102 The issue is whether any extension beyond disbursements by a master is required or desirable in Australia, and whether disbursements not made on account of a ship should be included. With respect to the master’s lien for disbursements:

[gjiven the facility of modern communication, the wide international spread of shipping com­ panies and world proliferation of specialist agents, the circumstances when a master will be re­ quired to assume a personal responsibility for the demands and contingencies of a voyage are probably diminishing.103

To the extent that agents are now making disbursements rather than masters it seems reasonable to allow agents to recover in admiralty. The argument for widening the class of people whose disbursement claims are within admiralty is simply to improve their chances of recovery against foreign shipowners. The argument against extension similarly parallels the more general argument for not extending admiralty jurisdiction; unlike the master, most agents, shippers and charterers are well able to protect themselves by ordi­

96. See eg Seamen’s Act 1898 (NSW) s 55-7 (which allocates business between magistrates and admiralty courts depending on several factors: the size of the claim, whether the ship is already under arrest, whether the owner or master is locally resident); Queensland Marine Act 1958 (Qld) s 44 (which allocates jurisdiction concurrently to the Supreme Court, courts having admiralty jurisdiction, and courts having

civil jurisdiction in respect of the amount of the claim with provision to ensure that small claims are brought in Magistrates or District Courts); Merchant Seamen Act 1935 (Tas) s 4(1); Merchant Shipping Application Act 1903 (WA) s 2(1) (which incorporate the relevant provisions of the Merchant Shipping Act 1894 (UK.) Pt II). 97. But see para 276 where it is recommended that the phrase ‘courts having admiralty jurisdiction’ be re­

pealed as unnecessary. 98. Navigation Act 1912 (Cth) s 152(3) (recovery of effects of deceased seaman). Merchant Shipping Act 1894 (UK) s 171 (same subject) as extended by Merchant Seamen Act 1935 (Tas) s 4(1) and Merchant Shipping

Act Application Act 1903 (WA) s 2(1). 99. See eg Navigation Act 1912 (Cth) s 77(4) (compensation for late payment of wages), s 88(1) (compensa­ tion for premature discharge), s 118(1) (compensation for supplying bad provisions), s 131(2) (recovery from ship by Commonwealth of its costs in caring for sick seamen). On the last point, see also Merchant

Shipping Act 1906 (UK) s 35. Further illustrations can be found in other Acts: eg Queensland Marine Act 1958 (Qld) s 74(1), 91, 97; Seamen’s Act 1898 (NSW) s 36(2), 60(3), 72. 100. See further para 274. 101. See para 119, 122. 102. Administration of Justice Act 1956 (UK) s l(l)(p); Supreme Court Act 1981 (UK) s 20(2)(p); Admiralty

Act 1973 (NZ) s 4(l)(p); Federal Court Act 1970 (Can) s 22(2)(p). 103. Thomas (1980) para 341. This presumably explains the virtual absence of modern reported decisions on master’s disbursements.

The Scope o f Statutory Rights o f Action In Rem / 123

nary commercial means (such as letters of credit or bank guarantees) against elusive ship­ owners. It follows from the position taken on the more general argument that the recom­ mendation should be for wider jurisdiction. The categories used in the overseas texts should be followed in the interest of uniformity. The reference to charterers and shippers is perhaps redundant since any disbursements made by these categories of people would normally be pursuant to a charterparty or contract for the carriage of goods by sea. As

such it could be recovered under other heads of jurisdiction. But their inclusion will do no harm. The term ‘agent’ would appear sufficiently elastic to cover not only those trad­ ing as ship’s agents but others making payments on behalf of the ship. To the extent that these payments are for necessaries or other goods and materials supplied on the request of the owner or master to a ship they could be claimed under the head of jurisdiction covering goods or materials supplied to a ship.104 But the overlap may not be complete105 and again the redundancy seems harmless. It is less clear that disbursements should ex­ tend beyond the current definition of payments made ‘on account of the ship’.106 As men­ tioned above, only the 1952 Arrest Convention and the South African legislation allows extension to disbursements on behalf of the ship’s owner. Such an extension apparently covers disbursements made on behalf of someone who happens to own a ship. This seems overbroad. The provision should cover only claims which are made on behalf of a ship.

165. Damage Done by a Ship. This head of jurisdiction should repeat in identical terms the jurisdiction given by the Admiralty Court Act 1861 (UK) s 7. ‘The figurative phrase “damage done by a ship” is a term of art in maritime law whose meaning is well settled by authority’.107 While the jurisdiction conferred by this phrase has been found in other countries to be too narrow, the legislative reaction has been to add further heads of juris­ diction to fill perceived gaps rather than to alter the wording of the hallowed phrase. The proposed legislation should follow the same course.

166. Personal Injury. Personal injury is capable of being ‘damage done by a ship’ for the purposes of admiralty jurisdiction where the ship is the ‘instrument’ of the damage but not otherwise.108 Justice Dixon long ago observed that: [t]he distinction between loss or injury inflicted by the ship regarded as an active agent and

loss or injury which, though occurring on or in connection with the ship and attributable to the negligence of the master or crew, is not ‘done by the ship’ may appear artificial and unreal. For, after all, whether, for example, a plaintiffs complaint is that he fell down an uncovered hatchway on the vessel or suffered immersion because his dinghy was overturned or swamped

by the movement of the ship, negligence in or about the management of the ship by her mas­ ter, officers or crew or one or some of them is the foundation of his cause of action, if any.109

Although the contrary view has occasionally been expressed110, there is no justification for excluding from admiralty jurisdiction the whole range of personal injury claims in­ volving the operation of ships. To do so would be to give an unjustified preference to property damage claims over personal injury claims. Accordingly the ‘artificial and un­

real’ distinction between different kinds of personal injury claims should be abolished by

104. See eg The Zafiro [1960] P 1, 14. 105. eg The Westport (No 3) [1966] 1 Lloyd's Rep 342. 106. Navigation Act 1912 (Cth) s 94(2) referring to master's disbursements. 107. The Eschersheim [1976] 1 All ER 920, 926 (Lord Diplock). Thomas (1980) para 176 itemises the types of

damage which fall within the phrase. 108. See para 43. 109. Nagrint v The Ship Regis' (1939) 61 CLR 688, 698. But see the comment in Union Steamship Co o f New Zealand v Ferguson (1969) 119 CLR 191, 202 (Windeyer J) that the distinction between injury done by a

ship and injury occurring on or in the ship "is not an easy one’. To the same effect, id, 209 (Barwick CJ). 110. PG Foss & RJM Anderson, 'Admiralty Jurisdiction in Western Australia', mimeo, Perth, 1976, 37, stated: We do not generally favour jurisdiction over personal injury caused on or by a ship, except possibly in the case of a foreign ship. A maritime lien or even a statutory lien for such things seem to be too

powerful a remedy.

124 / Civil Admiralty Jurisdiction

widening admiralty jurisdiction. In creating a new head of jurisdiction the overseas Acts follow one of two approaches. In addition to personal injury both approaches allow re­ covery for loss of life and both would be equally effective in overcoming doubts as to the validity of s 262 of the Navigation Act 1912 (Cth).111 One approach simply requires the loss of life or personal injury to have been ‘caused by a ship’ (thereby partially overlap­ ping the previous head of jurisdiction proposed) or to have occurred ‘in connection with the operation of any ship’.112 The second, more detailed approach, seeks to avoid the un­ certainty of this latter phrase by providing considerable elaboration.113 One of two types of nexus are required between the injury and a ship. The first is that the injury has re­ sulted ‘in consequence of any defect in a ship or in her apparel or equipment’.114 This overcomes the limitation under the head of ‘damage done by a ship’ that excluded recov­ ery where the injury resulted from the ship considered as premises or as a structure.115 As set out in the Supreme Court Act 1981 (UK) s 20(2)(f) the alternative nexus required is that the injury occurred

in consequence of the wrongful act, neglect or default116 of — (i) the owners, charterers or persons in possession or control of a ship; or (ii) the master or crew of a ship, or any other person for whose wrongful acts, neglects or de­ faults the owners, the charterers or persons in possession or control of a ship are respon­

sible,

being an act, neglect or default in the navigation or management of the ship, in the loading, carriage or discharge of goods117 on, in or from the ship or in the embarkation, carriage or dis­ embarkation of persons118 on, in or from the ship.

The language of s 20(2)(f) ‘is sufficiently wide to refer to loss of life or personal injury whether suffered on board the wrongdoing ship or some other ship, or even by a person with no connection with a ship’.119 But this is not overly broad. The second, more de­ tailed, formula is to be preferred, so as to include within admiralty all personal injury claims linked to the operation of a ship.120

167. Loss or Damage to Goods Carried in a Ship. The head of jurisdiction ‘damage done by a ship’ does not extend to cover damage to cargo aboard that ship. In a collision case in which one vessel was wholly to blame the owners of cargo aboard that ship could not arrest the ship for damage to their cargo.121 The proposed provision, an equivalent to

111. See para 55. s 262 can therefore be repealed. Recovery would also be allowed under the Law Reform (Miscellaneous Provisions) Act 1944 (NSW) and similar survival of actions legislation in other States and Territories. 112. 1952 Arrest Convention art 1 (1 )(b); Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(f)· 113. Administration of Justice Act 1956 (UK) s l(l)(f); Supreme Court Act 1981 (UK) s20(2)(f); Admiralty

Act 1973 (NZ) s 4(l)(f); Federal Court Act 1970 (Can) s 22(2)(g) (and note also s 22(2)(d)). 114. Supreme Court Act 1981 (UK) s 20(2)(f). 115. See para 43. In the United Kingdom, claims under the Occupier’s Liability Act 1957 (UK) which relate to ships would now, it seems, be able to be brought in admiralty jurisdiction: Hollingworth v Southern Ferries

Ltd; The Eagle [1977] 2 Lloyd’s Rep70. 116. The phrase ‘wrongful act, neglect or default’ is taken from Lord Campbell's Act of 1846 and is used in equivalent Australian legislation: see eg Compensation to Relatives Act 1897 (NSW) s 3(1). 117. Here and throughout the part of the Act dealing with admiralty jurisdiction ‘goods' includes baggage: Su­

preme Court Act 1981 (UK) s 24(1). 118. ‘Persons' is intended to include visitors. It would also include trespassers and stowaways, although the ex­ tent to which a duty of care is owed to such persons is of course a separate matter. 119. Thomas (1980) para 182. The comment is made in relation to the virtually identical text of the Adminis­

tration of Justice Act 1956 (UK) s l(l)(f). As an illustration, it would now be possible to bring in admir­ alty the type of claim rejected in Hamilton v SS Monterey [ 1940] NZLR 30 (claim by passenger arising out of alleged assault by her cabin steward) and in Loupides v The Schooner Catimeris' (1921) 69 DLR 138 (assault by master on crewman) where the tortious acts arose in the course of employment. 120. See further para 179-84 for the expansion of this formula to cover other tortious claims arising from the

operation of a ship. 121. The Victoria ( \ m ) 12 PD 105.

The Scope o f Statutory Rights o f Action In Rem / 125

which is found in all the overseas legislation, fills the gap. It is at least arguable that ‘loss or damage’ extends to conversion of the goods by the carrier.122 In most of the overseas Acts ‘baggage’ is included within ‘goods’.123 However, ‘baggage’ does not include ‘the be­ longings of those who are on board a ship, not as passengers or travellers, but as employ­

ees of the shipowners in order to man and operate her’.124 On one view the gap is not sig­ nificant: in most cases the crew’s ‘loss of personal effects will have arisen from collision or other damage to one ship, of which another ship was the physical instrument and, in such cases, a claim for loss will come within [the provision on] damage done by a ship’.125

However this will not be true where the carrying ship was entirely to blame for the collis­ ion. Nor will it be true where, in situations in which the owner of the ship is vicariously liable, one crew member damages the personal property of another. Arguably such situa­ tions are too trivial to contemplate allowing the arrest of the ship. However under the

provision as so far proposed (and under the equivalent provision in overseas Acts) it would be possible for a passenger to arrest the ship if a cabin steward dropped and there­ by damaged a passenger’s suitcase. Both types of property should be treated in the same way. A further problem is that the definition of ‘goods’/ ’baggage’ would not appear to in­ clude the stock-in-trade of concessionaires on passenger ships'26 or the tools and equip­ ment of independent contractors.127 The belongings of seamen, concessionaires, indepen­

dent contractors and the like should all be brought within the definition of ‘goods’ for the purposes of the proposed provision.

168. Agreements for Carriage o f Goods by Ship. There is a considerable degree of over­ lap between the previous provision and the provision proposed here. Most goods lost or damaged in or on a ship would be lost in breach of an agreement for their carriage. The principal object of the proposed provision

is to bring within the Admiralty jurisdiction the range of other claims, as for example claims arising out of the misperformance of an agreement, which may arise and which are not con­ nected with the care of the cargo. Included among such claims would be, for example, a claim for freight and demurrage, a claim for failure to perform a full number of voyages, and a

claim for refusal to carry specified cargo. The agreements referred to ... include charterparties, bills of lading and variants thereof.128

The claims may be in tort arising out of the agreement as well as in contract129, provided that there is a sufficient nexus with the ship in question.130 On the other hand a claim for insurance premiums for goods carried by sea is not sufficiently connected, and is accord­

122. Thomas (1980) para 183 citing The Widgans, an unreported English decision, folio 947 of 1976. 123. 1952 Arrest Convention art l(l)(f); Federal Court Act 1970 (Can) s 22(2)(h): Admiralty Act 1973 (NZ) s 2; Administration of Justice Act 1956 (UK) s 8(1); Supreme Court Act 1981 (UK) s 24. See The Es- chersheim [1974] 3 All ER 307, 316 (Brandon J) on how 'goods' would be interpreted so as to exclude

‘baggage’ in the absence of special provision. See also Larsen v The Ship Nieuw Holland' [1957] St R Qd 605 (F Ct). 124. The Eschersheim [1974] 3 All ER 307, 316 (Brandon J). 125. ibid.

126. eg Larsen v The Ship ‘Nieuw Holland’ [1957] St R Qd 605 (stock, plant and equipment in ship's hair­ dresser's, barber's and merchandise shops). 127. eg the instruments of the ship's band on a passenger ship or tools of a contractor working on the ship. 128. Thomas (1980) para 185 (footnotes omitted), referring to Administration of Justice Act 1956 (UK)

s KD(h).

129. The Si Elefterio [1957] P 179, 183 (Willmer J). See eg The Gina [1980] 1 Lloyd’s Rep 398, where the ship operator detained cargo claiming a possessory lien for freight. The cargo owner was held entitled to arrest the ship under this head claiming damages for wrongful detention of goods. 130. Galoil International Inc v Arkwright-Boston Manufacturers Mutual Insurance Co [1985] AC 255, overruling

The Sonia S [1983] 2 Lloyd's Rep 63 (container leasing). But see the position taken by United States courts: CTI Container Leasing v Oceanic Operations 682 F 2d 377 (1982); Integrated Container Service Inc v Starliner Container Shipping Ltd 476 F Supp 119 (1979).

126 / Civil Admiralty Jurisdiction

ingly not a claim arising out of an agreement ‘for’ the carriage of goods by ship.131 It is recommended that the proposed head of jurisdiction follow the language of the Supreme Court Act 1981 (UK) s 20(2)(h).

169. Agreements for the Use or Hire o f a Ship. The 1952 Arrest Convention art 1(1 )(d) and the Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(i) treat agreements for the use or hire of a ship as a separate head of jurisdiction. The other overseas Acts in­ corporate this with the previous head132, though not so as to restrict this head to the use of hire of a ship for the purpose of carrying goods.133 The agreements referred to include charterparties and thus this proposed provision overlaps to some extent with the previous one. But they also include agreements for all other uses to which a ship may be put, in­ cluding salvage services134, towage135 and mooring services136, as long as the use of a ship is more than merely a minor or incidental part of the provision of the services.137 It would seem that joint venture agreements involving the use of a ship are capable of coming within the head of jurisdiction.138 As with previous heads, the fact that the juris­ diction is defined in terms of ‘claims arising out of any agreement’ does not confine the jurisdiction to claims brought in contract but includes tort claims.139 Provided that there

is a sufficiently close nexus between the agreement and the cause of action the agreement does not have to be between the plaintiff and the shipowner.140 Again it is sufficient to fol­ low the language of the Supreme Court Act 1981 (UK) s 20(2)(h).

170. Construction, Repair, Alteration or Equipping of a Ship. This provision will preserve and extend the jurisdiction presently available under s 4 of the Admiralty Court Act 1861 (UK).141 Under s 4 jurisdiction over the subject matter arises only where the ship in ques­

131. Gatoil International Inc v Arkwright-Boston Manufacturers Mutual Insurance Co [1985] AC 255. For in­ surance claims see further para 173. The proposed head of jurisdiction extends to the enforcement of awards arising from an arbitration agreement relating to the carriage of goods in a ship: The St Anna [1983] 2 All ER 691. The question of enforcement of arbitration awards is dealt with separately: see para 185-9. 132. Thus the Supreme Court Act 1981 (UK) s 20(2)(h) reads: ‘any claim arising out of any agreement relating

to the carriage of goods in a ship or to the use or hire of a ship’. 133. The Eschersheim [1976] 1 All ER 920, 926 (Lord Diplock), refusing to follow a 19th century decision fa­ vouring a narrow ejusdem generis interpretation of similar statutory language in s 2 of the County Courts Admiralty Jurisdiction Act 1869 (UK). 134. ibid. 135. The Conoco Britannia [1972] 2 QB 543. 136. The Queen o f the South [1968] P 449. 137. cf Kuhr v The Ship ‘Friedrich Busse’{1982) 134 DLR (3d) 261, 264-5 (Addy J) (contract for supply of fish

to a fish processing vessel not a contract relating to use of a ship within the Federal Court Act 1970 (Can) s 22(2)(i)); Dome Petroleum Ltd v Hunt International Petroleum Co [1978] 1 FC 11 (contract to drill for oil not for use or hire of ship even though it involves use of drilling ships and supply vessels); Sumitomo Shoji Canada Ltd v The Juzan Maru [1974] 2 FC 488 (contract between cargo owner and warehouseman not for hire of ship even though warehouseman always used a barge to unload cargo owners goods; ware­ housing activities central, use of barge only incidental). 138. Mortensen and Lange v Neptune International Shipping Ltd [1981] 2 FC 232, 235 (Mahoney J) interpreting

Federal Court Act 1970 (Can) s 22(2)(i). 139. The St Elefterio [1957] P 179. 140. The Antonis P Lemos [1985] AC 711. The facts were unusual and the chain of charterparties involved was complex. P was a sub-charterer of the vessel under a time charter. P entered into a voyage charter with TP

under which P guaranteed the maximum draught of the vessel at port of arrival. On arrival the draught was exceeded, P incurring extra expense thereby. P arrested the ship under the Supreme Court Act 1981 (UK) s 20(2)(h), on the basis of an ‘agreement relating to ... the use or hire of a ship’. The cause of action was based on the negligence of the master and other servants of the owners in loading the ship beyond the specified draught, with knowledge of the specification in the charterparty between P and TP. The

House of Lords held that this nexus with the agreement and the (assumed) provisions in the chain of charterparties between P and the owner, under which the master and crew were to act under the charter­ er’s orders with respect to loading, rendered the negligence claim sufficiently bound up with agreements for the hire of a ship to validate the arrest of the ship. 141. See para 40.

The Scope o f Statutory Rights o f Action In Rem / 127

tion is already under arrest or the proceeds of its sale are in the control of the court. Con­ sistently with the overseas Acts this requirement should be deleted. Where the constructor or repairer has possession of the ship and has a possessory lien, the right to proceed in rem is perhaps superfluous. But not all repairers and equippers have such possession so that the proposed head is useful.142 The question has arisen whether subcontracts for the

supply of equipment for a ship are within the Federal Court Act 1970 (Can) s 22(2)(n). Justice Addy stated: It seems absolutely clear to me that the claim is one which ‘arises out of a contract relating to the construction of ... a ship’. It may be true that it is not a contract of construction of a ship,

nor a contract for the construction of a ship, since it is one for the supply and installation of the propulsion system, but the supply and installation of the system constitute an integral part of the actual construction itself and it, therefore, certainly ‘relates’ to the construction of a ship and could not do so more directly without being a contract for the construction of the entire

ship.143

It is not clear that much is achieved by bringing such subcontracts within admiralty be­ cause the occasion for proceeding in rem will not often arise. The subcontractor will not own that or any other ship in most situations, and it has already been concluded that (apart from surrogate ship arrest) identity be required between the ship referred to in the

head of jurisdiction and the ship arrested.144 The subcontractor will normally not be able to proceed against the ship in question because the contractual dispute will generally be with the prime contractor, not the owner of the vessel. But some scope for arrest may ex­ ist during the period after a new ship has been launched (that is, has become a ‘ship’ for

admiralty purposes) but before it is handed over to its ultimate owner. During this period (in respect of either the wrongdoing or a surrogate ship) the subcontractor will be able to pursue claims against the contractor by an action in rem if the claims fall within this pro­ posed head. For this reason, and for consistency with overseas legislation, a broad pro­ vision should be inserted, extending to all claims (including claims by subcontractors) re­

lating to the construction, alteration, repair or equipping of a ship.

171. Goods, Materials or Services Supplied to a Ship. There is a degree of overlap be­ tween the previous proposed head of jurisdiction and a provision giving jurisdiction over ‘any claim in respect of goods or materials supplied to a ship for her operation or main­ tenance’145, in that what is supplied may be ‘equipment’ and thus covered by the previous

head.146 This proposed provision would broaden the present jurisdiction by eliminating the requirement that what is supplied fall into the category of ‘necessaries’ and allow ac­ tions even where the necessaries were supplied in the ship’s home port or its owner was a local resident.147 ‘Maintenance’ for example, would cover non-essential maintenance.

Things which are ‘necessaries’ at present would, it seems, all fall within the proposed pro­ vision.148 It is unclear whether the supply of services can ever come within the head of

142. See also para 108 for the recommendation that claims for construction before launch be able to be com­ menced after the launch of the ship. 143. R v Canadian Vickers Ltd [1976] 1 FC 77, 83 (emphasis in original), affirmed [1979] 2 FC 410. The issue arose in the context of an attempt to join the engine makers as third party in a suit against the shipbuild­

er.

144. See para 124-5. 145. Supreme Court Act 1981 (UK) s 20(2)(m). 146. See eg Lewmarine Pty Ltd v The Ship Kaptayanni' [1974] VR 465, 471-72 (Pape J); Argosy Marine Co v The Jeannot ΰ [1970] Ex CR 351 (radar equipment supplied to a ship held to be a necessary).

147. Admiralty Court Act 1861 (UK) s 5. See para 41. 148. Under pre-1956 law payments made by way of advances to enable necessaries to be purchased were themselves ‘necessaries', and thus within the head of jurisdiction relating to the supply ‘of goods or ma­ terials’ under Administration of Justice Act 1956 (UK) s l(l)(m): The Fairport (No 5)[ 1967] 2 Lloyd's Rep

162, Kuhr v The Ship Friedrich Busse' (1982) 134 DLR (3d) 261, 266 (Addy J). The latter decision argu­ ably represents an extension of the definition of necessaries in holding that the supply of fish to a ship de­ signed to process fish at sea is within the definition.

128 / Civil Admiralty Jurisdiction

jurisdiction as defined in the United Kingdom legislation.149 The supply of many services would fall under other proposed heads: for example, pilotage, towage, salvage, repairs and agent’s disbursements. The major form of service not covered is that of loading and unloading of ships. The Merchant Shipping (Stevedores and Trimmers) Act 1911 (UK) s 3 gave admiralty jurisdiction over such claims. But it has since been repealed150 and not replaced, in order that the United Kingdom might conform to the 1952 Arrest Conven­ tion which does not allow arrest on such claims.151 Similar legislation in New Zealand152

has also been repealed and replaced by a provision giving admiralty jurisdiction only in personam over stevedores’ claims.153 This provides a rare example of legislation in this century reducing the scope of admiralty jurisdiction. The Canadian legislation explicitly gives jurisdiction in rem over claims or questions arising out of ‘stevedoring and lighter­

age’ services as well as other services for the ‘operation or maintenance’ of a ship.154 This is worded sufficiently broadly to allow claims not only in respect of services actually ren­ dered but also for anticipatory breaches by ship operators of contracts to render ser­ vices.155 In contrast the relevant South African provision refers to ‘services rendered to a ship for the employment or maintenance thereof156, and makes no specific reference to stevedoring claims. There is no reason in principle why the supply of services should not be put on the same basis as the supply of goods and materials.157 The proposed legisla­ tion is not being drafted with a view to putting Australia in a position to ratify the 1952 Arrest Convention. Accordingly, it is recommended that claims for services supplied or to be supplied to a ship be included in the provision.158 Specific reference should be made to stevedoring and lighterage services.

149. See The Queen o f the South [1968] P 449, 457 (Brandon J) where the point was discussed but did not have to be decided. 150. Administration of Justice Act 1956 (UK) s 7(1). 151. But see W Tetley, ‘Stevedores and Maritime Liens’ (1983) 8 Maritime Lawyer 269, 285 where it is argued

that stevedoring services were capable of being necessaries under the Admiralty Court Acts of 1840 and 1861: cf D Ipp, ‘Admiralty Jurisdiction and the Claims of Stevedores’ (1982) 4(3) M L A A N Z Newsletter 22, 25 (at present ‘Australian Courts do not have Admiralty jurisdiction over the claims of stevedores’). Tetley relies on The Equator ( 1921) 9 Lloyd's Rep 1, in which it was said that the passage of the Merchant

Shipping (Stevedores and Trimmers) Act 1911 (UK) was unnecessary to give stevedores a statutory right of action in rem. Hill J remarked that the services of stevedores had time after time been held to be neces­ saries but cited no authority (id, 1). See also Aldershot Contractors Equipment Rental Ltd v The Ship 'Pro- tostatis' (1967) 67 DLR 2d 174 (hire of mobile crane to unload a stranded ship held to be a necessary). If this view is correct, English admiralty courts continue to have jurisdiction by virtue of the Supreme Court Act 1981 (UK) s 20(1 )(c) over those claims of stevedores for services necessary to enable the ship to con­ tinue its voyage. 152. Shipping and Seamen Act 1952 (NZ) s 486(2). 153. Admiralty Act 1973 (NZ) s 14(3), s 4( 1 )(n). The Beattie Committee Report ( 1972) 12 note 4 stated that the

Committee could envisage circumstances arising in New Zealand where it would be desirable to have available the power to arrest ships on stevedores’ claims and the Committee’s Draft Bill provided accord­ ingly. An amendment reducing the right of action to one exercisable in personam only was made during passage of the Bill through Parliament. 154. Federal Court Act 1970 (Can) s 22(2)(m). See also Canada Shipping Act 1934 (Can) s 702, as revised by

the Federal Court Act 1970 (Can) Schedule 11(5), which also gives the admiralty court jurisdiction to or­ der arrest on such claims. 155. cf Wolfe v SS Clearpool (1922) 67 DLR 538 (claim for damages for owner’s refusal to permit stevedores to load ship in accordance with contract not within admiralty jurisdiction even where claim for services ren­

dered would be within jurisdiction as a claim under statute for necessaries). 156. Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(I) (emphasis added). 157. Under United States law stevedoring claims are treated on the same basis, giving rise to a maritime lien: Gilmore & Black (1975) 630. In France stevedoring services do not give rise to a maritime claim sufficient

to arrest the vessel (except in circumstances which would very rarely arise in practice): Tetley (1983) 294. 158. As proposed, this head would cover the line handling services rendered in The Queen o f the South [1968] P 449. Art 1(1)(1) of the CMI draft revision of the Brussels Convention also expressly includes ‘services supplied to the ship’.

The Scope o f Statutory Rights o f Action In Rem / 129

Other Possible Heads of Jurisdiction

172. Damage Done to a Ship. The 1952 Arrest Convention contains no head of jurisdic­ tion for damage ‘received by’ or ‘done to’ a ship. All the overseas legislation examined in this Report does. However the Supreme Court Act 1981 (UK) allows only in personam actions under this head. The reason why the ability to proceed in rem was removed has

already been discussed.159 The relevant ship under this head of jurisdiction is the one that receives the damage, that is, the plaintiffs ship. For an action in rem to lie it is necessary to identify a ship belonging or demise chartered to the relevant person (that is, the poten­ tial defendant).160 A head of jurisdiction for ‘damage done to a ship’ does not do this. But there are good reasons for including such a head of jurisdiction in admiralty so as to al­ low actions in personam. For example, a collision between a ship and some object other than a ship may well give rise to a dispute as to liability. The shipowner’s claim or

counterclaim for damage to the ship should be within admiralty jurisdiction just as much as the claim by the owner of the other object involved.161 Accordingly in personam admir­ alty jurisdiction with respect to claims for damage done to a ship should be conferred in the proposed legislation.

173. Marine Insurance. Only the Canadian and South African legislation amongst the overseas Acts considered in this Report contain provisions specifically giving to admir­ alty courts jurisdiction over marine insurance.162 It was suggested in the course of draft­ ing the 1952 Arrest Convention that a right of arrest be given in respect of insurance pre­

miums but this was not accepted.163 Partly in reliance on the travaux preparatoires of the Brussels Convention the House of Lords held that claims for unpaid insurance premiums for cargo were not within admiralty jurisdiction under s 47(2)(e) of the 1956 Act (still in force in Scotland), because they were not sufficiently clearly described as relating to an agreement for the carriage of goods in a ship.164 Similar reasoning would apply to the ar­ gument that an insurance contract for the ship itself related to the use of the ship.165 The earlier view was that insurance companies and P & I clubs had other ways of securing payment of insurance premiums or calls than through in rem proceedings.166 More recent­ ly, changes in market conditions and the insolvency of one P & 1 club have contributed to a change of view, and the consensus of opinions expressed to the Commission was that

159. See para 124. 160. Professor DC Jackson has suggested that in some circumstances the shipowner may wish to proceed in rem for damage done to the shipowner’s own ship, eg damage to the ship through the negligence of a de­ mise charterer during the currency of the charter: Submission 54 (28 October 1985), and see Jackson

(1985) 12-13, 72-3. If the conclusion in para 124-5 is accepted, the only cases where the action in rem should lie are those where the ship belongs to or is demise chartered by the relevant person. Conceptually there is no reason why the plaintiff should not be the owner of the wrongdoing ship, eg where the relevant person is the demise charterer. Damage to the ship can be done by it, in the sense required. Accordingly, in the example given the owner could proceed in rem for damage done by the ship, either against the

wrongdoing ship (if this was worthwhile) or against a surrogate ship belonging to the demise charterer of the wrongdoing ship. There is accordingly no need for a specific head of jurisdiction in rem for damage done to a ship. 161. For the possible extension of preliminary acts in such cases see para 297. It is also desirable that courts of

limited jurisidction have power to deal with claims for damage done to a ship: cf The Eschersheim [1976] 1 All ER 920, 927 (Lord Diplock). 162. Federal Court Act 1970 (Can) s 22(2)(r); Admiralty Jurisdiction Regulation Act 1983 (S Af) s 1(1 )(ii)(r). 163. CMI Bulletin No 105, 79. 164. Gatoil International Inc v Arkwright-Boston Manufacturers Mutual Insurance Co [1985] AC 255. 165. In The Aifanourios [1980] 2 Lloyd’s Rep 403, where a P & I club sought to arrest a ship in respect of a re­

lease call, it was held that there was no right to proceed in rem in Scotland on such a claim. The decision was applied by the House of Lords in the Gatoil case: [1985] AC 255. 166. The issue is restricted to the collection of unpaid premiums and calls of various kinds. The conclusion in para 124-5 means that there can be no question of arresting a ship which an insurance company or P & 1

club happens to own.

130 / Civil Admiralty Jurisdiction

a head of jurisdiction covering insurance premiums and P & I club calls is desirable.167 Problems can arise from the way in which P & I clubs operate. A member of a club may have to pay an initial call in respect of each ship entered in the club, possibly further ‘back calls’ during the course of the year (depending on the rate of claims against the club during the year), and, on withdrawal of the ship from the club, a release call which

releases the member from liability for any further calls. The club has no difficulty in col­ lecting the initial call; if the owner fails to pay the ship is simply not covered. But back and release calls can be more difficult to collect, especially if the shipowner disposes of the vessel entered. If the club has had a run of claims and a substantial back call becomes necessary, the unscrupulous owner has every incentive to avoid payment and seek cover elsewhere. The ability to arrest in rem by the club claiming in respect of back or release calls is thus useful, as is clear from the inclusion of a provision Governing ‘insurance pre­ miums (including mutual insurance calls) in respect of the ship’ in art l(l)(q) of the CMI Draft revision of the Brussels Convention (1985).168 For these reasons the proposed legis­ lation should allow an action in rem to recover an insurance premium or mutual in­ surance call in respect of a ship.169 A further question is whether the right to proceed in rem should extend to actions against cargo for unpaid cargo insurance.170 The 1985 CMI draft provision does not extend so far, and on balance such an extension does not seem necessary. For most purposes admiralty jurisdiction focuses on the ship in question and its equipment: there is no general facility (apart from specific provisions such as salvage and general average) to proceed in rem against cargo, and no clear need for such an ex­ tension in the case of cargo insurance.171

174. Dock and Harbour Dues. The 1952 Arrest Convention and the overseas legislation examined in this Report all confer jurisdiction in admiralty over claims for dock and har­ bour dues.172 The Acts under which the various public port authorities operate in Aus­ tralia contain their own provisions for securing the payment of port charges.173 What

167. See eg MA Hill, Submission 27 (14 February 1985); S Westgarth, Submission 42 (12 April 1985). Cases in recent years involving claims by insurance companies or clubs include: Empress Lineas Maritimas Argen- tinas v Oceanus Mutual Underwriting Association (Bermuda) Ltd [1984] 2 Lloyd's Rep 517; Banque Paribas v Fund o f Sale o f the M V Emerald Transporter 1985 (2) SAfLR 452, and the Gatoil case, [1985] AC 255. 168. See para 94. Such a provision would not cover cases where the ship’s owners have allowed the insurance

on the ship to lapse and those claiming against the ship have insured it to protect their interest in the se­ curity pending the judicial sale. In The Fairport it was recognised that insurance by a claimant in these circumstances was proper and yet the premium could not form part of the claim against the res as it would not fall within any head of English admiralty jurisdiction. However the cost of insurance was al­ lowed by the Court to be included as part of the costs of the action. As such it could be recovered from the res: [1965] 2 Lloyd’s Rep 183. (The insurance point is found on an addendum slip intended to be in­ serted at id, 186). This solution seems adequate for present purposes. 169. Consistently with the principles discussed in para 70, there is no constitutional objection to this recom­

mendation. Reliance could be placed upon s 51(14) of the Constitution, which however excludes State in­ surance. But it seems clear that marine insurance contracts would fall within the ambit of ‘admiralty and maritime jurisdiction’ in s 76(iii) of the Constitution. Such contracts were within the inherent admiralty jurisdiction in Scotland (but not in England): Sailing Ship Blairmore' Co Ltd v Macredie [1898] AC 593,

606 (Lord Watson). They have always been within admiralty jurisdiction in the United States: De Lovio v Boit 7 Fed Cas 418 (1815). They are treated as an admiralty and maritime matter in Canada: In­ termunicipal Realty & Development Corp v Gore Mutual Insurance Co (1977) 108 DLR(3d) 494, 496-499, 505 (Gibson J); Zavarovalna Skupnost Triglav v Terrasses Jewellers Inc [1983] 1 SCR 283. 170. The Gatoil case [1985] AC 255 involved the arrest of a ship, allegedly owned by the defendant cargo own­

ers, which had no connection to the cargo in question or to the contract of carriage. Such an arrest is pos­ sible in Scotland as a form of attachment under s 47 of the 1956 Act, but consistently with The Es- cherscheim (see para 124-5) would not be possible in England even if marine insurance claims were with­ in admiralty. 171. See para 107, 109-10. 172. Brussels Arrest Convention, art 1 (1)(1); Federal Court Act 1970 (Can) s 22(2)(s); Administration of Jus­

tice Act 1956 (UK) s 1(1 )(n); Supreme Court Act 1981 (UK) s 20(2)(n); Admiralty Act 1973 (NZ) s 4(l)(m); Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(m). 173. eg Port of Geelong Authority Act 1958 (Vic) s 82; Fremantle Port Authority Act 1902 (WA) s 52.

The Scope o f Statutory Rights o f Action In Rem / 131

happens when the exercise of these provisions conflicts with the custody of the admiralty Marshal is discussed in chapter 12.174 The provisions typically allow ships to be detained as security and it might be questioned whether there is any need to attempt to duplicate, still less to replace, these provisions in the proposed legislation. On the other hand where a ship is insolvent, it is desirable that the court have power to deal with all claims involv­

ing the ship, including claims for dock and harbour dues. A further reason for such juris­ diction is that it may help ease the conflict between the exercise of statutory powers and admiralty powers of detention and sale.175 Jurisdiction should accordingly be given over claims for dock and harbour dues and charges, and over similar dues and charges (for ex­ ample, light dues).176

175. Pollution from Ships. The 1952 Arrest Convention contains no head of jurisdiction specifically dealing with pollution claims. It is unclear whether the head ‘damage caused by any ship either in collision or otherwise’177 covers claims for pollution damage:

Certainly the phrase is capable of a wide enough interpretation to cover oil pollution damage if more weight is given to the words ‘or otherwise’ than to the words ‘by any ship’; but equally, if the weighting is reversed, the conclusion would be that oil pollution damage is caused, not by a ship, but by oil, and so is excluded.178

Of the overseas legislation being considered in this Report only the South African legisla­ tion contains a separate head of jurisdiction dealing with pollution. It allows claims aris­ ing under specific legislation and also ‘any claim relating to the pollution of the sea or the seashore by oil or any other similar substance’.179 This does not require that the source of

the pollution be a ship and it is therefore too broad for the purposes of the proposed leg­ islation. The Supreme Court Act 1981 (UK) is the only other legislation to deal with pol­ lution. Section 20(5) does so indirectly by defining the head of jurisdiction ‘damage done

by a ship’ so as to include ‘any claim in respect of a liability incurred under the Merchant Shipping (Oil Pollution) Act 197Γ and any claims in respect of a liability falling on the International Oil Pollution Compensation Fund. The 1971 Act implements the Interna­ tional Convention on Civil Liability for Oil Pollution Damage180 and the Compensation

Fund is associated with that Convention.181 Australia has ratified the Convention but is not a party to the Compensation Fund.182 The obligations arising under the Convention are reflected in the Protection of the Sea (Civil Liability) Act 1981 (Cth)183, which is one

174. See para 265-6. 175. See The Charger [1966] 3 All ER 117 for an English illustration of a harbour authority electing not to use its statutory authority to arrest and detain but instead to proceed in rem. 176. Lighthouses Act 1911 (Cth) s 17. 177. Art 1(1 )(a). The 1985 CMI draft revision of the Convention expressly includes preventive and clean-up

costs (art 1(1 )(d)) and through the generality of its introductory language also probably includes pollution damage claims. 178. DW Abecassis, The Law and Practice Relating to Oil Pollution from Ships. Butterworths, London, 1978, 160. See also para 165.

179. Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(w). 180. Brussels, 29 November 1969. 181. International Convention on the Establishment of an International Fund for Compensation for Oil Pollu­ tion Damage, Brussels, 18 December 1971.

182. The Liability and Fund Conventions were amended in important respects by two Protocols concluded in 1984, which have not yet entered into force. See AHE Popp, 'Liability and Compensation for Pollution Damage caused by Ships Revisited’ [1985] Lloyd's MCLQ 118. 183. All the significant operative parts of the Convention are given the force of Commonwealth law by s 8(1).

Sch I of the Act contains the text of the Convention.

132 / Civil Admiralty Jurisdiction

of a number of Acts passed in 1981 to deal with maritime oil pollution.184 The Conven­ tion imposes what is essentially a strict liability on shipowners in respect of pollution damage but gives a right to limit liability according to a formula contained in the Con­ vention where the damage occurred without the actual fault or privity of the owner.185

Only courts in the country where damage has occurred have jurisdiction over claims in respect of that damage.186 ‘No claim for compensation for pollution damage shall be made against the owner otherwise than in accordance with this Convention’.187 Australia would be in breach of its obligations were it to allow arrest of (thereby asserting jurisdic­ tion over) a ship of a Convention country in respect of an oil pollution damage claim which arose in the waters of another country. At present, jurisdiction over in personam claims arising under the Convention is conferred on State and Territory Courts188, and there is no specific facility to pursue Convention-based claims in rem. The fact that the scheme, with its jurisdictional nexus requirement, is stated to be the exclusive method of recovery presumably overrides whatever wider admiralty jurisdiction over oil pollution otherwise would be available under the rubric of ‘damage done by a ship’.189 The Act must also be taken to have impliedly amended the wider power to detain a ship which has caused damage contained in s 383 of the Navigation Act 1912 (Cth).190 The scheme is recent and complex, and it gives effect to international treaty obligations. It should not be altered by the proposed legislation. However, the proposed legislation should spell out precisely how that scheme interrelates with admiralty jurisdiction. It should specifically include as claims which can be enforced by proceedings in rem claims for pollution dam­ age under the Protection of the Sea (Civil Liability) Act 1981 (Cth), but should provide that any such claims must satisfy the jurisdictional nexus requirements in art IX. It will follow that an action in rem will be available for ‘pollution damage’191 occurring in Aus­ tralian waters but not for ‘pollution damage’ occurring elsewhere.192 This leaves open the question of claims for damage by pollution done by a ship which is not ‘pollution dam­ age’ as defined. Some such claims may fall within the rubric ‘damage done by a ship’ or, if they involve personal injury, within the head of jurisdiction recommended in para 166. In particular cases other heads of jurisdiction may also be available. The question whether a more general provision is desirable covering a shipowner’s liability for damage or loss more generally is discussed in para 179-84.

1B4. The other Acts were the Protection of the Sea (Discharge of Oil from Ships) Act 1981 (Cth), the Protec­ tion of the Sea (Powers of Intervention) Act 1981 (Cth), the Protection of the Sea (Shipping Levy) Act 1981 (Cth), the Protection of the Sea (Shipping Levy Collection) Act 1981 (Cth) and the Navigation (Pro­ tection of the Sea) Amendment Act 1981 (Cth). The Protection of the Sea (Discharge of Oil from Ships) Act 1981 (Cth) was repealed and replaced by the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (Cth). 185. Art III, V. 186. Art IX. 187. Art 111(4). 188. Protection of the Sea (Civil Liability) Act 1981 (Cth) s 9, 10. 189. A possible but perhaps unlikely reading of the Protection of the Sea (Civil Liability) Act 1981 (Cth) is that

it is intended to provide the exclusive means of recourse, thereby eliminating admiralty jurisdiction en­ tirely. 190. See para 275 for discussion of s383, which provides what is in effect a statutory right of arrest in respect of damage, including in some situations damage occurring outside Australia. 191. As defined in art 1(6) of the Convention. 192. There is a body of State legislation dealing with oil pollution of navigable waters. Some of the Acts allow

a limited right to detain ships though none explicitly purport to confer admiralty jurisdiction: eg Pollu­ tion of Waters by Oil Act 1973 (Qld) s 23(3)(b), 24(3)(b); Navigable Waters (Oil Pollution) Act 1960 (Vic) s 26(3)(b), 27(3)(b); Western Australian Marine (Sea Dumping) Act 1981 (WA) s 12(3). The Environment

Protection Act 1973 (Tas) s 50(2) allows in some circumstances the seizure and forfeiture of 'a ship, barge, tank, or other vessel' which has been used to pollute the sea. To the extent that any of the State legislation conflicts with the Pollution Convention as made part of Commonwealth law the latter clearly prevails un­ der s 109 of the Constitution. There is therefore no need to be concerned with how this State legislation interrelates with the proposed legislation.

The Scope o f Statutory Rights o f Action In Rem / 133

176. Limitation of Liability Actions. The Australian law governing the rights of owners and operators of ships to limit the amount of their liability with respect to damage claims is set out in the 1957 Liability Convention193, which is made part of the law of the Com­ monwealth by s 333 of the Navigation Act 1912 (Cth). Section 335 gives jurisdiction over applications to limit liability under the Convention to State and Territory Supreme Courts. A separate regime covers applications to limit liability in respect of oil pollution

damage but jurisdiction is given to the same courts.194 In both cases there is power to transfer applications to other courts.195 The absence of jurisdiction in admiralty courts (other than State and Territory Supreme Courts) to entertain applications would there­

fore not be fatal. But it would be inconvenient if the defendant in an admiralty action had to go to another court to apply to limit. It is clearly desirable to hear the application to limit and the substantive action in the same proceeding because the ability to limit is contingent on an absence of ‘the actual fault or privity of the owner’196 in respect of the

acts which form the basis of the underlying claim. Determining the presence or absence of fault will usually require investigation of the same issues as are relevant to the underly­ ing claim. It is also necessary to cater for the fact that limitation proceedings may be commenced in personam by the shipowner (for example in relation to ‘apprehended’

claims197) or by way of a defence to proceedings in rem or in personam against the ship­ owner, and for the possibility that the legislation giving rights to limit liability may be State or Territory legislation.198 ‘Substantive’ applications to limit liability should be re­ stricted to Supreme Courts and any other superior court exercising admiralty jurisdic­ tion.199 However all courts exercising admiralty jurisdiction should have the power (sub­ ject to provisions for remittal or transfer of proceedings) to hear ‘defensive’ limitation

claims in respect of cases within the court’s jurisdiction. The definition of limitation pro­ ceeding should be broad enough to extend to State or Territory legislation which is paral­ lel to the two Commonwealth Acts giving rights to limit. 177. Forfeiture or Condemnation of a Ship. The equivalent English provision on this

topic allows within admiralty any claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried, in a ship, or for the restoration of a ship or any such goods after seizure, or for droits of Admiralty.200 It is necessary to deal separately with forfeiture and condemnation and with droits of ad­ miralty. At present in Australia it is not clear what admiralty jurisdiction exists over for­

feiture of ships and goods. It is established that not all statutory provisions which em­ power the forfeiture of a ship fall within admiralty jurisdiction. For example, fisheries legislation commonly provides for forfeiture.201 In relation to the forfeiture provisions of the Fisheries Act 1925 (Tas) it has been argued that

193. International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships, Brus­ sels, 10 October 1957; the text forms Schedule 6 to Navigation Act 1912 (Cth). 194. Protection of the Sea (Civil Liability) Act 1981 (Cth) s 10. The regime applicable is that set out in the 1969 Pollution Convention discussed in para 175.

195. id, s 11; Navigation Act 1912 (Cth) s 335(2). 196. 1957 Limitation Convention art 1(1); 1969 Pollution Convention art V(l). 197. Navigation Act 1912 (Cth) s 335(1); Protection of the Sea (Civil Liability) Act 1981 (Cth) s 10(1). This is the usual procedure. 198. Both the Acts referred to in n 197 allow for State and Territory legislation governing applications to limit

in respect of intra-state ships: see s 334 read with s 2(1), and s 7, respectively. For an example of recent State legislation in this area see Western Australian Marine Act 1982 (WA) s 86 which confers jurisdiction on the Supreme Court with provision for transfer to the Supreme Court of another State or Territory. 199. See ch 11 for discussion of which superior courts should exercise admiralty jurisdiction. For procedure in limitation actions see para 299. 200. Supreme Court Act 1981 (UK) s 20(2)(s). 201. eg Fisheries Act 1957 (Qld) s 94(1); Fisheries Act 1958 (Vic) s 64; Antartic Marine Living Resources Con­

servation Act 1981 (Cth) s 17.

134 / Civil Admiralty Jurisdiction

the Police Magistrate in ordering forfeiture would be exercising a limited Admiralty Jurisdic­ tion conferred by the Fisheries Act and as the Fisheries Act was not reserved for the Royal As­ sent or approved by His Majesty through a Secretary of State, the conferring of such Jurisdic­ tion would have been done without complying with Section 4 of ‘The Colonial Courts of Ad­ miralty Act, 1890’, and would have been of no force, and the Police Magistrate would have no jurisdiction to condemn the boat.202

The Tasmanian Supreme C ourt rejected the argument:

If this is a revenue case the matter is not one for the Admiralty Jurisdiction. An examination of the many Acts relating to smuggling shows a long series of enactments by which goods, ships and boats might be forfeited, but it always is done by the ordinary Courts upon proceed­ ings laid by a Customs Officer, and the Statutes never have treated such forfeitures as subjects for an Admiralty case. Neither can I find a trace of any question relating purely to breaches of the fisheries laws having come before an Admiralty Court during the last few centuries; I omit

reference to ‘Royal Fish’ and Droits of Admiralty because no question of that sort arises here ... Taking our Admiralty Jurisdiction therefore to be that of the High Court of England in 1890 this Court as a Colonial Court of Admiralty has no jurisdiction over a boat offending merely against fisheries or revenue laws and the jurisdiction given to the Courts of Petty Sessions could be and was properly given without a reservation of the Act for the Royal Assent.203

Even if this reasoning were to be followed204, a provision in terms of the English pro­ vision on forfeiture would leave it unclear just which kinds of forfeiture of ships would fall within it. With respect to the registration of ships, the Shipping Registration Act 1981 (Cth) s 181 gives jurisdiction over forfeiture exclusively to State and Territory Supreme Courts.205 With respect to im proper use of ships some State legislation gives jurisdiction over forfeiture to the Supreme Court.206 With respect to forfeiture of dangerous goods shipped illegally by sea, the Merchant Shipping Act 1894 (UK) s 449 gives jurisdiction to ‘any court having Admiralty jurisdiction’. Similar jurisdiction is given by the Navigation Act 1912 (Cth) s 252 and by some State legislation.207 In other States the jurisdiction is given to magistrates courts.208 Jurisdiction over forfeiture is also given to admiralty courts by the Piracy Act 1850 (UK), the Foreign Enlistment Act 1870 (UK), the Slave Trade Act

1873 (UK) and the Pacific Islanders Protection Act 1875 (UK).209 The proposed legisla­ tion should not confer jurisdiction over forfeiture. Forfeiture is a penal remedy which is out of place in what is basically a civil jurisdiction. The omission will avoid the need to explore 19th century adm iralty decisions in order to discover just what kinds of forfeiture are covered by admiralty jurisdiction. If this recommendation is accepted, the question arises of what to do about existing legislation which confers forfeiture jurisdiction on ad ­ miralty courts. Section 252 of the Navigation Act 1912 (Cth) should be amended to give jurisdiction instead to State and Territory Supreme Courts. The position with respect to

202. Challenger v Rae (1929) 24 Tas LR 53, 60. 203. id, 62-3 (Nicholls CJ). For an example of the forfeiture legislation referred to, see eg Customs Act 1901 (Cth) s 228-9. Jurisdiction is given by s 245 to State and Territory Supreme Courts. 204. In The Skylark [1965] P 476 the Court accepted without question that an action in rem for forfeiture under

the Customs and Excise Act 1952 (UK) fell within the forfeiture head of jurisdiction in the Administra­ tion of Justice Act 1956 (UK) s l(l)(s). 205. The situations giving rise to forfeiture (s 32, 33) relate to a ship improperly assuming or concealing Aus­ tralian nationality. The situations are fewer in number than those under the Merchant Shipping Act 1894

(UK) s 16, 28(4), 67(2), 69, 70, 71 and the Merchant Shipping Act 1906 (UK) s 51(2) (both now repealed for Australia). Other Commonwealth legislation also gives State and Territory Supreme Courts jurisdic­ tion over forfeiture of ships: see eg Historic Shipwrecks Act 1976 (Cth) s 25; Minerals (Submerged Lands) Act 1981 (Cth) s 93(1 )(c). 206. eg, Commercial Vessels Act 1979 (NSW) s 51B (use of vessel in prescribed waters without permit). 207. eg, Marine Act 1936 (SA) s 91; Western Australia Marine Act 1982 (WA) s 94. 208. eg, Queensland Marine Act 1958 (Qld) s 149(3); Marine Act 1958 (Vic) s 164. The Marine Act (NT) s 107

provides for forfeiture of dangerous goods but makes no provision as to jurisdiction. 209. These provisions will be discussed in the separate Report on criminal admiralty jurisdiction and prize: see para 7.

The Scope o f Statutory Rights o f Action In Rem / 135

equivalent State legislation is more difficult. That legislation appears to operate merely to grant jurisdiction over forfeiture to a State court identified by reference to its having ad­ miralty jurisdiction. No addition is made to admiralty jurisdiction by such a provision. Therefore the proposed legislation need make no reference to this legislation or attempt to alfect it in any way.

178. Wreck and Droits o f Admiralty. There is no need to confer admiralty jurisdiction in respect of the droits of admiralty. The category is a residual one covering rights to Royal fish and other obscure vestiges of the prerogatives of the Crown in right of admiralty.210 There is no evidence that admiralty jurisdiction is ever exercised in respect of these mat­ ters or that any inconvenience would result from its abolition. On the other hand jurisdic­ tion over matters concerning wreck clearly remains important. It is undesirable to per­

petuate the present situation in which the inherent jurisdiction of admiralty over wreck exists alongside the statutory jurisdiction contained in the Navigation Act 1912 (Cth).211 If it is accepted that the overlap should be removed the question of method arises. One

possible solution would be to repeat the recommendation made for salvage jurisdiction, that is to leave all the substantive provisions in the Navigation Act 1912 (Cth) but to transfer all the jurisdictional provisions to the proposed legislation.212 But the better

alternative is to leave the whole matter to be dealt with by the Navigation Act. That Act provides for a receiver of wreck and it would be difficult to carve out of it provisions dealing only with jurisdiction and transfer them to admiralty. Some of the jurisdiction with respect to wreck is criminal in nature.213 Moreover there seems to be little or no need for the remedy peculiar to admiralty, the action in rem, in disputes involving wreck. It is true that 19th century admiralty decisions support the proposition that a maritime lien is not lost if the res is destroyed as long as any identifiable part remains.214 This in turn sug­ gests that the lien holder might wish to proceed in rem against a ‘wreck’ as defined by s 294 of the Navigation Act 1912 (Cth). It is possible to envisage problems arising due to the overlap between the law of wreck and of salvage on both substantive and procedural levels.215 The wreck provisions of the Navigation Act 1912 (Cth) do not appear to have been drafted with admiralty procedure in mind.216 It may be advantageous if admiralty courts continue to have full jurisdiction over wreck so that difficulty arising could be dealt with. On the other hand, in selecting courts to exercise admiralty jurisdiction the

power of plaintiffs to select an appropriate forum, and the powers to be conferred in the proposed legislation to transfer matters between courts, will greatly reduce the prospect of an admiralty court being unable to deal with all aspects of a dispute.217 All matters of

210. See para 51. 211. The Merchant Shipping Act 1894 (UK) s 529 subordinates admiralty jurisdiction over wreck to the wreck regime set out in the Act: cf Pierce v Bemis [1986] 2 WLR 501, 504 (Sheen J) (statutory provisions treated as in effect a code). The Navigation Act 1912 (Cth) has no equivalent provision.

212. See para 155. It would in any event be unnecessary to transfer any jurisdictional provisions from the His­ toric Shipwrecks Act 1976 (Cth), because the provisions refer only to criminal matters (s 27) and to com­ pensation actions under s 51(31) of the Constitution (s 21). 213. See s 296-8, 302-3, 312-4. 214. The Sydney Cove (1815) 2 Dods 13, 13: 165 ER 1399, 1400 ("a seaman's claim for his wages was sacred as

long as a single plank of the ship remained'); The Nepiune (1824) 1 Hagg 227; 166 ER 81. See para 99 where a statutory clarification to this effect is recommended. 215. See eg The Cargo ex Schiller (1877) 2 PD 145 (CA) where possible difficulties, including the ranking in priority of the receiver of wreck's expenses vis-a-vis a salvor's claim, are referred to. See also Robinson v

Western Australian Museum (1977) 138 CLR 283, 316-23 (Stephen J) where salvage claims in respect of wrecks are discussed. 216. s 303 provides that only the receiver of wreck or the owner may keep possession of the wreck. This might be interpreted as excluding arrest and custody by the admiralty Marshal, s 307(c) states that any dispute

in regard to the expenses o f a receiver of wreck 'shall be determined by the Minister, whose decision shall be final'. Again a possible conflict with admiralty jurisdiction exists. There must also be doubt about the constitutional validity of s 307(c), as a conferral of judicial power on the Minister. 217. See para 238.

136 / Civil Admiralty Jurisdiction

wreck jurisdiction should be left to the Navigation Act 1912 (Cth) (and State and Terri­ tory legislation where the Navigation Act does not cover the field).218

General Tortious Claims

179. Sources of Jurisdiction over Maritime Torts. In Australia a wide range of torts at sea already fall within specific statutory heads of jurisdiction, such as damage to or by a ship and damage to cargo.219 The expansion of the number and scope of heads of jurisdiction recommended in this Report will increase the range of torts specifically within jurisdic­ tion, in particular the suggested heads covering claims for personal injury and loss of life and loss of or damage to goods carried by ships.220 As pointed out in para 49, Australian Colonial Courts of Admiralty also possess the ill-defined inherent jurisdiction of the High Court of Admiralty over certain torts on the high seas, a jurisdiction retained by the present English Supreme Court through a residual or ‘sweeping-up’ clause in the Su­ preme Court Act 1981 (UK).221 However it is recommended below222 that no residual clause be included in the proposed Australian legislation. The question therefore arises whether there is anything in the inherent jurisdiction over torts on the high seas that has

not been covered by the expanded specific heads of jurisdiction, and that should be in­ cluded. There is also the related question whether there are other tortious claims of a broadly maritime character which may be outside the proposed specific heads of admir­ alty jurisdiction and which should be included in the proposed legislation.

180. Scope of Inherent Jurisdiction. The very nature of the inherent jurisdiction makes the first question difficult to answer. References to the ‘torts at sea’ aspect of the inherent jurisdiction have often been in general terms, and have ranged from the restrictive or negative to the relatively expansive. In R v Judge o f City of London Court, Lord Esher

MR stated that the judges of the Admiralty Court had ‘given up their original claim to exercise jurisdiction over every tort committed on the high seas’.223 While not going quite so far, Lord Herschell in The Zeta was clearly reluctant to concede the old claims to jur­ isdiction.224 Since then, however, there have been a number of broad statements tending the other way. Sir Henry Duke declared in The Tuhantia that ‘a suit in respect of injuri­

ous acts done upon the high seas was within the undisputed jurisdiction of the Court of Admiralty’225, and similar pronouncements, with a similar lack of precision, can be found in Canadian226 and Australian decisions.227 2 2 8 Clear instances of torts actually held to fall within the inherent jurisdiction, though, are rare. In The Tubantia 22S, an action in per­ sonam for trespass to a wreck and interference with salvage operations succeeded under the residual head of jurisdiction. Actions in personam for assaults by masters upon

218. The wreck provisions of the Navigation Act 1912 (Cth), like many other aspects of that Act, should be re­ viewed: see para 62. This matter is outside the scope of this Report. 219. See para 42-3. 220. See para 166-7. 221. Supreme Court Act 1981 (UK) s 20(l)(c). 222. See para 193. 223. [1892] 1 QB 273, 298. 224. [1893] AC 468, 481,485. 225. [1924] P 78, 86. 226. Commonwealth Pacific Cable Co v The Prince Albert' ( 1926) 3 WWR 309, 310-311 (Martin J), citing with­

out disapproval the reasoning in The Ship DC Whitney’ v St Clair Navigation Co (1905) 10 EX CR 1. 227. See eg Union Steamship Co o f New Zealand Ltd v Ferguson (1969) 119 CLR 191, 207 (Barwick CJ), 211 (Owen J). 228. [1924] P 78.

The Scope o f Statutory Rights o f Action In Rem / 137

crewmen229 and passengers230 would also apparently succeed231 (though actions in rem would not).232 Little else appears to have been decided. Conversion of a cargo at sea has been raised as a possibility but no conclusion has yet been reached.233 Of these three in­ stances, at least two will probably now be included under the proposed specific heads of jurisdiction. Assaults causing physical injury by masters upon crewmen or by masters

and even crewmen upon passengers will fall within the personal injury head, in those cases where they occur in the course of employment.234 Conversion of cargo at sea will arguably fall within the proposed head of loss of or damage to goods carried by a ship.235 Actions both in rem and in personam will therefore now lie for these torts, provided the

person liable in personam is the owner or demise charterer of the ship when the action is commenced. Trespass to wreck in the possession of a salvor or tortious interference in the operations of a salvor, on the other hand, would probably not fall within any of the heads of jurisdiction proposed so far.236 As regards actions in rem this is arguably the cor­ rect result. Where there is interference with a wreck in the possession of a salvor or delib­ erate interference with salvage operations, there will not necessarily be any nexus be­ tween a vessel of the tortfeasor and the trespass or other tort committed. To allow an ac­ tion in rem in these circumstances would run contrary to the nexus requirements dis­ cussed in para 124-5. But where there is a connection between a vessel of the tortfeasor and the relevant interference, there is no reason why admiralty jurisdiction in rem should

not exist.237

181. Maritime Torts Not Resulting in Physical Injury. A related question is whether there are other torts (whether or not within the inherent jurisdiction) which should be included in admiralty. Several possibilities have been suggested. One concerns torts that do not in­ volve physical injury, such as false imprisonment, or assaults not in fact causing physical harm. Another concerns torts resulting in purely economic loss, as, for example, in the case of one ship blocking another in a harbour. At present, Australian courts with juris­

diction under the Colonial Courts of Admiralty Act 1890 (UK) have inherent jurisdiction in personam over assaults by masters upon crewmen and passengers.238 This would pre­ sumably include assaults not resulting in physical injury, though there is no authority on the point. No action in rem will lie.239 The question of false imprisonment does not seem to have arisen. The principal English actions for false imprisonment at sea have been brought at common law240, including the most recent decision in 1957.241 In the United

States, torts at sea, including the torts of assault242 and false imprisonment have long formed an important part of Admiralty jurisdiction.243 It is now settled that such torts

229. The Agincourl (1824) 1 Hagg 271; 166 ER 96; The Lowther Castle (1825) 1 Hagg 384; 166 ER 137; The Enchantress (1801) 1 Hagg 395; 166 ER 140. 230. The Ruckers (1801) 4 C Rob 73; 165 ER 539. 231. These decisions were referred to with approval in The Zeta'[ 1893] AC 468, 483 (Lord Herschell). 232. Loupides v The Schooner ‘Calimeris’ ( 1921) 69 DLR 138; Hamilton v SS 'Monterey' [1940] NZLR 31, 35-6

(Myers CJ). 233. The Terukawa Maru (1972) 126 CLR 170, 176 (Menzies J). 234. See para 166 η 119. 235. See para 167. 236. See para 156. 237. Jurisdiction may exist in some cases already, eg where the defendant's vessel injures a wreck: The Zelo

[1922] P 9. Similarly, if a tortfeasor were to actually take possession of a wreck in contravention of a salvor’s established right of possession, the salvor may have an action in rem as a 'claim relating to pos­ session of a ship’. 238. See the cases cited in n 229-31.

239. See para 180 n 232. 240. Boyce v Bayliffe (1807) 1 Camp 58; 170 ER 875; King v Franklin ( 1858) I F & F 360; 175 ER 764. 241. Hook v Cunard Steamship Co Ltd [1953] 1 All ER 1021. 242. The Whisper 268 F 464 (1920). 243. The State o f Missouri 76 F 376 (1896).

138 / Civil Admiralty Jurisdiction

give rise to a maritime lien and can therefore be pursued in rem.2ii As pointed out earlier, a right of action in rem will only be available in Australia for these torts where ‘personal injury’ results.2 4 4 245 Little judicial guidance is available on the meaning of ‘personal injury’ in this context; in fact there seems to have been no relevant decision upon its ambit either in relation to s 20(2)(f) of the Supreme Court Act 1981 (UK) (and its predeces­ sors)246 or its Canadian and New Zealand counterparts.247 In other contexts ‘personal in­ jury’ has sometimes been taken to include psychological injuries such as nervous shock248, but has sometimes been held to exclude non-physical injury.249 It is difficult to see why claims for physical injury attributable to the owner or charterer of a ship and arising in the operation of the ship should be within jurisdiction, whereas other claims for damages meeting these conditions should not. Whatever distinction presently exists (and the pre­ cise distinction is obscure) is the result not of any considered view of the scope of admir­ alty jurisdiction but of the accidents of its evolution.250 These uncertainties would be avoided by the addition of a head of jurisdiction allowing claims for damages generally, rather than simply for personal injury, where there is wrongdoing on the part of the own­ er, charterer or operator of the ship (or those for whom they are responsible) arising from the navigation or management of the vessel.

182. Exclusion of Economic Loss? One effect of a generally worded provision of this kind will be to confer admiralty jurisdiction over maritime claims (such as in negligence) where the loss involved has been purely economic. Many such actions already fall within established heads of jurisdiction. For example, time or voyage charterers may seek to claim in negligence for wasted hire (or lost profits) where the chartered vessel has had to be repaired following a collision.251 The question is not whether such claims will succeed as a matter of substantive law252, but whether the courts have jurisdiction to entertain them should an in rem be brought to enforce them. In the example given, jurisdiction over actions in rem is conferred under the rubric of ‘damage done by a ship’. In most cases where economic loss claims are made — whether based on negligence or on some other cause of action in tort — one of the heads of jurisdiction will be available. In some instances, however, that will not be the case. Where one ship negligently blocks another’s exit from an anchorage, for example, the injury caused will almost certainly not fall with­ in any of the existing heads of jurisdiction. The most likely head is that of ‘damage done by a ship’. Under this head the damage caused must be the ‘direct result or natural conse­ quence of something done by those engaged in the navigation of the ship’ and the ship it­ self must be the actual instrument by which the damage is done.253 There need be no physical contact between the ship and whatever sustains the damage but it appears that

244. Gilmore and Black (1975) 628-9. 245. See para 166 n 119. 246. Administration of Justice Act 1956 (UK) s 1(1 )(f); Supreme Court of Judicature Consolidation Act 1925 (UK) s 22(1) & (2). 247. Federal Court Act 1970 (Can) s 22(2)(g); Admiralty Act 1973 (NZ) s 4(0-248. Yales v South Kirby Collieries [1901] 2 KB 538 (worker’s compensation statute). 249. See eg the common law meaning: R v Yea [1901] 1 All ER 864. 250. Another objection might be that these claims will sometimes be for relatively minor amounts, but that is

no more an objection here than in relation to any head of jurisdiction. See para 147. 251. See eg Chargeurs Reunis Campagnie Francaise de Navigacion a Vapeur v English and American Shipping Co. The Merida (1921) 9 Lloyd’s Rep 464; Elliott Steam Tug Co Ltd v Shipping Controller [1922] 1 KB 127; Konstantinidis r World Tankers Corp Inc. The World Harmony [1965] 2 All ER 139; Candlewood Naviga­

tion v Mitsui OSK Lines. The Mineral Transporter [ 1985] 2 All ER 935 (PC). 252. The authorities cited in n 251 establish that such claims will not succeed as a matter of substantive law. On the other hand the High Court in Caltex Oil (Australia) Ply Ltd v The Dredge 'Willemstad' (1976) 136 CLR 529 upheld a claim for economic loss caused by the defendant negligently severing a pipeline. The

Caltex case was distinguished by the Privy Council in The Mineral Transporter [1985] 2 All ER 935, and cf Leigh & Sillivan v Aliakmon Shipping Co Ltd [1986] 2 WLR 902 (HL). The divergence between English and Australian authority remains unresolved. 253. The Eschersheim [1976] 1 All ER 920, 926 (Lord Diplock).

The Scope o f Statutory Rights o f Action In Rem / 139

physical damage must result for this head of jurisdiction to apply.254 Mere economic loss is insufficient. As a result, admiralty jurisdiction may not extend to actions in rem or in personam for economic loss resulting from blocking. The few negligent 'blocking' cases that have been decided appear to indicate that no recovery will be permitted.255 Neverthe­

less, should such an action be available as a matter of substantive law there is no reason for preventing the enforcement of such a claim through an action in rem. In the case of a deliberate blocking that results in economic loss, an action in tort would clearly lie as a matter of substantive law256 and an action in rem should be available. In each of these cases the wrongdoing ship is clearly identified, and the other conditions for an action in

rem (that is, a link between ship and relevant person when the cause of action arose and when the proceedings were commenced) are met. The provision proposed in para 181 covering all claims for damages where these conditions are met has the further advantage of including various cases within the residual admiralty jurisdiction which would other­ wise be excluded.257

183. Arguments Against Including Economic Loss Claims. On the other hand, claims for economic loss have long been a cause of considerable disquiet among defendants and their insurers. Unlike claims for physical damage, such claims can be both difficult to quantify and virtually unlimited in size. Any expansion of their scope is therefore re­

garded by some with suspicion and alarm. A number of submissions argued that the pro­ posed legislation should not attempt to pre-empt the debate over economic loss claims in the maritime context by creating a new and controversial head of admiralty jurisdic­ tion.258 The answer to the latter argument is that to confer such jurisdiction would not

create, and should be clearly expressed not to create, any new cause of action. Unless the right to claim for economic loss exists as a matter of substantive law no claim will suc­ ceed under the proposed Act. In addition, as was pointed out earlier, most recognised claims for economic loss already fall within existing heads of jurisdiction. To permit jur­ isdiction in admiralty over these claims but to deny jurisdiction over others of a maritime character (such as, for example, the deliberate blocking of a ship in harbour) is unwar­

ranted.

254. ibid. Even in excluding the need for a collision. Lord Diplock in The Eschersheim talked in terms of con­ tact with ‘whatever object sustains the damage' not being essential. The example given was that of a ship’s wash causing physical damage. 255. In The Maindy Manor ( 1933) 45 Lloyd's Rep 231, 238 Bateson J implied that no action for economic loss

for negligent blocking could succeed. See also Anglo-Algerian S S v Moulder [1908] 1 KB 659 (although cf Walton J, id 665); Osborne Panama SA v Shell & BP South African Petroleum Refineries (Ply) Ltd 1982 (4) SAf LR 891, affirming on this point 1980 (3) SAf LR 653. A recent decision in which such a claim did suc­ ceed is Interocean Shipping Co v M /V Atlantic Splendour [ 1984] AMC 1332, though the authorities do not appear to have been thoroughly canvassed and the decision is not easy to reconcile even with some of the decisions cited in support. For a discussion of these and other cases, see NJJ Gaskell. 'Economic Loss in the Maritime Context’ [1985] LM CLQ 81, 102-8. For an early decision in which a claim for damages in negligence for blocking succeeded, see S & R Steamships Ltd v London County Council (1938) 82 Sol J 353. 256. Either in nuisance (Rose v Miles 4 M & S 99 (1815); 105 ER 773) or perhaps in one of the innominate

torts: see generally JG Fleming, The Law o f Torts. 6th edn. Law Book Co, Sydney, 1983, 649-62; JD Heydon, 'The Future of the Economic Torts' (1975) 12 UWAL Rev I; JC Scowcroft, Economic Loss in Admiralty: A re-examination of Foundations' (1985) 16 JM LC 167. 257. eg the examples given in para 180-1. 258. FMB Reynolds, Submission 57 (6 November 1985); WE Paterson QC, Submission 62 (18 November

1985); P Willis, Deputy Corporate Solicitor, BHP Co Ltd, Submission 68 (15 November 1985); Australian Mining Industry Council, Submission 86 (13 May 1986). On the other hand provision for economic loss claims was supported by Professor DC Jackson, Submission 54 (28 October 1985); Dr J Wong, Submission 59 (10 November 1985). R Cooper QC, Submission 70 (6 December 1985) argued for a general provision covering 'torts at sea', at least allowing actions in personam.

140 / Civil Admiralty Jurisdiction

184. Conclusion. For these reasons, there should be a right of action in rem for damages arising from acts on the part of owners, charterers or operators in navigating or manag­ ing a ship. The provision need make no specific reference to economic loss claims as such. This, and a provision making it clear that the legislation creates no new causes of action, will avoid the concern that the general law of tort would be indirectly influenced by the legislation. Such a head of jurisdiction is supported by the adoption, in the CMI

Draft Revision to the Brussels Convention, of generic language in the definition of ‘mari­ time claim’ which would undoubtedly include claims such as those envisaged.259

Maritime Arbitrations and Other Proceedings

185. Arbitration or Other Proceedings and Admiralty. The 1952 Arrest Convention does not refer to arbitration. The only overseas legislation examined in this Report which does is the Admiralty Jurisdiction Regulation Act 1983 (S Af) s l(l)(ii)(x), which gives jurisdic­ tion in admiralty over ‘any claim for the enforcement of, or arising out of, any judgment

or arbitration award relating to a maritime claim, whether given or made in the Republic or elsewhere’. In considering the need for such a provision, three distinct situations need to be distinguished. In ascending order of difficulty these are, first, the enforcement of ar­ bitration awards, given in Australia or elsewhere, involving maritime claims; secondly, the commencement of an action in rem so as to obtain security in pending proceedings, judicial or arbitral, local or foreign; and thirdly, the enforcement of judgments given

against a ship in local or foreign proceedings by action in rem. These situations will be dealt with separately.

186. Enforcement of Arbitration Awards. The first situation relates to an arbitration of a maritime claim, where an award has been made which remains unsatisfied. Whether or not a cause of action in personam which has been adjudicated upon in a local arbitration merges in the award of that tribunal, it is clear

that a cause of action in rem, being of a different character from a cause of action in per­ sonam, does not merge in a judgment in personam, but remains available to the person who has it so long as, and to the extent that, such judgment remains unsatisfied.260

It could be argued that no special provision is necessary for the protection of someone who has agreed to arbitration but failed to obtain satisfaction of the award. If they had a right of arrest before the arbitration that right continues.261 But it is desirable to ensure proper co-ordination between the admiralty jurisdiction and maritime arbitration, so that plaintiffs are neither unduly prejudiced by the loss of security in the res while arbitration is pending, nor given an inducement to litigate in admiralty in breach of an arbitration agreement in order to obtain security not available in the arbitration proceedings. More­ over, it is better to acknowledge the reality that proceedings on a cause of action which is the subject of an unsatisfied award are in substance proceedings on the award itself.262 Fi­ nally, a plaintiff who complies with an arbitration agreement may be prejudiced in being

259. See further para 194. 260. The Rena K [1979] QB 377, 405 (Brandon J). It may well be possible that the award may be invoked as an issue estoppel in any subsequent action in rem: ibid; and see also The Tuyuli [1984] 2 All ER 545, 553 (Goff LJ).

261. See The St Anna [1983] 2 All ER 691 (Sheen J), holding that an action to enforce an arbitration award made pursuant to an arbitration agreement in a charterparty was an action which arose out of the charterparty, not merely out of the award. As a result the action fell within admiralty jurisdiction as 'a claim arising out of any agreement relating to the carriage of goods in a ship’ within the Supreme Court Act 1981 (UK) s 20(2)(h). 262. cf BID, ‘Arrest and Arbitration' [1984] LM CLQ 370, 372-3.

The Scope o f Statutory Rights o f Action In Rem / 141

out of time in bringing subsequent in rem proceedings on the cause of action263, the de­ fendant having failed to comply with the award. For these reasons the admiralty jurisdic­ tion should expressly extend to the enforcement of local or foreign arbitration awards given in respect of a maritime claim as defined in the legislation. This will enable an ac­ tion in rem to be commenced against the ship in question, provided that it is still owned by or demise chartered to the party liable under the award.264 The question whether the award in question is enforceable in Australian courts is a matter of substance, governed in the case of foreign awards by the Arbitration (Foreign Awards and Agreements) Act

1974 (Cth). The effect of the proposed provision is jurisdictional only.

187. Obtaining Security Pending Arbitration or Foreign Court Proceedings. More difficult problems can occur when an attempt is made to combine the security aspect of an action in rem with determination of the merits by some tribunal other than the local admiralty court. This may arise in several ways. One is where the plaintiff has agreed to arbitrate the claim but is concerned that assets may not be available when the award is made or judgment given either to satisfy the award or judgment or to arrest in rem should the

award or judgment remain unsatisfied.265 The plaintiff therefore wishes to arrest in rem at the outset so as to preserve the res (or the security put up to secure its release) in the event that the arbitration award remains unsatisfied. Alternatively the plaintiff may arrest the ship in support of the admiralty action with every intention of pursuing that action and with no intention of arbitrating. The defendant will then seek a stay of the admiralty pro­

ceedings under the relevant Arbitration Act266 on the basis that the plaintiff had earlier agreed to submit the dispute to arbitration.267 A similar problem arises where the defend­ ant seeks a stay on the basis that the parties had agreed to submit the dispute to the juris­ diction of a foreign court268 or on forum non conveniens or lis abili pendens grounds. In all these situations the issue is, assuming the stay is granted, what to do with the res (or the security put up to secure its release). In The Golden Trader, Justice Brandon said:

There are, as it seems to me, in principle, three ways in which the problem ... can be dealt with. First, the security can be retained to satisfy any judgment or award of the other tribunal. Sec­ ondly, the security can be released, but only on condition that the defendant provides other equivalent security outside the court to satisfy the judgment or award of the other tribunal. Thirdly, the security can be released unconditionally.269

The 1952 Arrest Convention art 7 necessarily implies that where the court of arrest has no jurisdiction on the merits, or where the parties have agreed to submit the dispute to a foreign court or to arbitration, then, provided that the plaintiff brings proceedings in a court which has jurisdiction on the merits, or in the agreed foreign court, or

before the agreed arbitration tribunal, within a time allowed by the court of arrest the security

263. In particular if the proposal (para 252-3) to apply ordinary limitation periods to admiralty actions is ac­ cepted. 264. Or a surrogate ship, under the circumstances outlined in ch 10. 265. For enforcement of foreign admiralty judgments see para 190-2.

266. eg Arbitration Act 1902 (NSW) s 6; Arbitration Act 1895 (WA) s 6; Arbitration (Foreign Awards and Agreements) Act 1974 (Cth) s 7(2). s 11 of the 1974 Act preserves the effect of the Sea-Carriage of Goods Act 1924 (Cth) referred to in n 268. 267. See eg Huddart Parker Ltd v The Ship Mill Hill' (1950) 81 CLR 502 in which the interaction between arbi­

tration and admiralty jurisdiction and the question of granting a stay of court proceedings is canvassed. 268. Note that foreign jurisdiction clauses are void in contracts covered by legislation dealing with the car­ riage of goods by sea: eg Sea-Carriage of Goods Act 1924 (Cth); Sea-Carriage of Goods (State) Act 1921

(NSW) s 6. This will presumably change if Australia adopts the Hamburg Rules (United Nations Conven­ tion on the Carriage of Goods by Sea, Hamburg, 31 March 1978) art 21 of which gives some scope to jur­ isdiction clauses. 269. [1975] QB 348, 352. See also The Rena K [1979] QB 377, 397-98 (Brandon J).

142 / Civil Admiralty Jurisdiction

will not be released, but will remain in the court of arrest to satisfy any judgment in the other court or any award in the arbitration.270

In England, resolution of the point has been complicated by legislation which makes mandatory the granting of a stay of court proceedings where it has been agreed that arbi­ tration shall take place in a State party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958).271 This complication does not arise in Australia because the 1974 Act allows a stay in New York Convention cases upon such terms as the court thinks fit.272 Free of this complication, it has become clear from the

English decisions that, whenever a stay is discretionary, the court may make it a con­ dition of granting the stay that the res (or security in its stead) will remain available.273 Under the Supreme Court Act 1981 (UK) there is no power to arrest simply to provide security for a maritime arbitration (or presumably to provide security for foreign litiga­ tion). However, the power to order arrest under the ordinary heads of admiralty jurisdic­ tion remains available although one motive for the action is to obtain security in other proceedings.274 2 7 5 The jurisdiction exists irrespective of the motive. But it has been held that, although possessing jurisdiction, the court may as a matter of discretion decline to exer­ cise it. Alternatively if the arrest had already taken place the court had a discretionary power to order the release of the res.115 The test in exercising this discretion ‘is whether, if the plaintiff should obtain an award ... the defendant might well be unable to satisfy it’.276 2 7 7 In theory the security is not held by the admiralty court to provide a fund from which any amount awarded in arbitration is to be paid. Rather it is held against the possibility that the arbitration will fail to run its course, and that the stay on the in rem proceedings will be lifted and a judgment in favour of the plaintiff given in admiralty.217 The practical effect however will be that the admiralty arrest will result in the plaintiff obtaining securi­ ty for the arbitration whenever the plaintiff can show a real prospect of difficulty in re-270. The Golden Trader [1975] QB 348, 353. See also The Maritime Trader [1981] 2 Lloyd’s Rep 153, 158 (Sheen

J).

271. See now Arbitration Act 1975 (UK) s 1. Both The Golden Trader [1975] QB 348 and The Rena K [1979] QB 377 involved such arbitrations. But cf Mike Trading and Transport Ltd v R Pagnan & Fratelli [1980] 2 Lloyd’s Rep 546, 549-50 (Lord Denning MR). 272. Arbitration (Foreign Awards and Agreements) Act 1974 (Cth) s 7(2). s 7(3) also provides that the court

may make ‘such interim or supplementary orders as it thinks fit in relation to any property that is the sub­ ject of the matter’ to which the staying order given under s 7(2) relates. There is no question that the 1958 Convention itself prevents interim relief being ordered in relation to stayed proceedings: art 11(3) merely requires the court to refer the parties to arbitration in certain circumstances, cf Filia Campania Naviera

SA v Petroship SA [1982] AMC 1217 (SONY); CN Brower & WM Tupman, ‘Court-Ordered Provisional Measures under the New York Convention’ (1986) 80 A JIL 24. 273. The Golden Trader [1975] QB 348; The Rena K [1979] QB 377. In The Andria [1984] 1 All ER 1126, 1134 the Court of Appeal observed that, though it was not necessary to consider the point and argument was

not offered on it, ‘we proceed on the basis that the principle is sound". See also The Atlantic Star [1974] AC 436 (willingness of party seeking a stay on forum non conveniens grounds to provide alternative se­ curity if stay granted is a relevant fact in deciding whether to exercise discretion to grant stay); The Abidin Dover [1984] 1 All ER 470, 478 (Lord Diplock), 487 (Lord Brandon) (lis alibi pendens, offer by de­ fendant in English action to transfer security obtained by plaintiff by arrest in England to other forum, undertaking to this effect could be made part of order staying English action). In the converse situation, where an English-based plaintiff has arrested a ship in another jurisdiction in order to provide security for an arbitration to take place in England, the English courts will not generally grant the defendant an injunction preventing the plaintiff from maintaining the foreign arrest: Marazura Navegacion SA v

Oceanus [1977] 1 Lloyd’s Rep 283. See further DR Thomas, ‘Admiralty Security and the Arbitral Process' [1983] LMCLQ 495. 274. The Andria [1984] 1 All ER 1126, reversing the decision of Sheen J and not following The Cap Bon [1967] 1 Lloyd’s Rep 543; The Golden Trader [1975] QB 348; The Rena K [1979] QB 377, and The Maritime Trad-

er[1981] 2 Lloyd’s Rep 153. 275. The Andria [1984] 1 All ER 1126, 1134. The source of both discretions was found in the Admiralty Rules: RSC (UK) O 75 r 5(1), 13(4). 276. The Tuyuti [1984] 2 All ER 545, 554 (Goff LJ) 277. The Rena K [1979] QB 377; The Tuyuti [1984] 2 All ER 545.

The Scope o f Statutory Rights o f Action In Rem / 143

covering the amount of any award.278 Section 26 of the Civil Jurisdiction and Judgments Act 1982 (UK) having since come into force, English admiralty courts now have the dis­ cretionary power directly to order that property be arrested and held as security for the satisfaction of any award or judgment of another tribunal which can be locally en­ forced.279 A similar power exists under s 5(3) of the South African Act280, although there are a number of differences between the two provisions.281

188. Reform Options. One option would be to make no reference to the problem. Pre­ sumably (there being no Australian authority on the point) Australian courts would fol­ low the English decisions referred to in para 187.282 These decisions allow an admiralty court in most cases to achieve in practice a result whereby the plaintiff can obtain security

for a pending arbitration or foreign proceeding. This option is not recommended. That result has only been reached after considerable litigation. It is better to confer on admir­ alty courts explicit power to maintain security despite a stay of proceedings. An express provision would avoid what might be regarded as a fiction in the judicial reasoning out-278. In The Tuyuti [1984] 2 All ER 545, 553 Goff LJ refused to accept counsel’s argument that in reality admir­

alty court process was being used to provide security for other proceedings, something which he accepted that admiralty courts have no power to do. 279. s 26 provides: (1) Where in England and Wales or Northern Ireland a court stays or dismisses Admiralty proceedings

on the ground that the dispute in question should be submitted to arbitration or to the determination of courts of another part of the United Kingdom or of an overseas country, the court may, if in those proceedings property has been arrested or bail or other security has been given to prevent or obtain release from arrest — (a) order that the property arrested be retained as security for the satisfaction of any award or judg­

ment which — (i) is given in respect of the dispute in the arbitration or legal proceedings in favour of which those proceedings are stayed or dismissed; and (ii) is enforceable in England and Wales or, as the case may be, in Northern Ireland; or (b) order that the stay or dismissal of those proceedings be conditional on the provision of equiva­

lent security for the satisfaction of any such award or judgment. (2) Where a court makes an order under subsection (1), it may attach such conditions to the order as it thinks fit, in particular conditions with respect to the institution or prosecution of the relevant arbi­ tration or legal proceedings. (3) Subject to any provision made by rules of court and to any necessary modifications, the same law

and practice shall apply in relation to property retained in pursuance of an order made by a court under subsection (1) as would apply if it were held for the purposes of proceedings in that court. 280. s 5(3) provides: (3) (a) A Court may in the exercise of its admiralty jurisdiction order the arrest of any property if —

(i) the person seeking the arrest has a claim enforceable by an action in rem against the prop­ erty concerned or which would be so enforceable but for arbitration or proceedings con­ templated in subparagraph (ii); (ii) the claim is or may be the subject of an arbitration or any proceedings contemplated,

pending or proceeding either in the Republic or elsewhere and whether or not it is subject to the law of the Republic. (b) Unless the Court orders otherwise any property so arrested shall be deemed to be property ar­ rested in an action in terms of this Act. (c) A court may order that any security for or the proceeds of any such property shall be held as se­

curity for any such claim or pending the outcome of the arbitration or proceedings. Cases where s 5(3) has been applied include Katagum Wholesale Commodities Co Ltd v The MV Paz 1984 (3) SAf LR 261; Euromarine International o f Mauren v The Ship Berg 1984 (4) SAf LR 647. 281. The principal difference is that the South African provision does not require an action in rem actually to

be commenced, but merely requires an application for arrest, to which certain consequences flowing from arrest in an action in rem are attached. The UK provision assumes an invocation of admiralty jurisdiction by the commencement of proceedings, s 5(3) is thus closer to a form of saisie conservatoire, s 26 also ex­ pressly allows an order for alternative security rather than maintaining the arrest. To ensure that the court

has sufficient power to deal with the matter fairly, and to avoid time limit problems for a plaintiff pending arbitration, the UK model is to be preferred on both points. 282. cf the decisions of Canadian courts: Ship M V Sea Pearl v Seven Seas Shipping Corp (1982) 139 DLR (3d) 669; The Didymi. unreported, FCt, 11 May 1984, (Reed J).

144 / Civil Admiralty Jurisdiction

lined in para 187. It would also allow problems which might arise from that reasoning to be explicitly addressed. For example, at present the court in theory stays the admiralty action but retains the res in custody. It might be that further steps have to be taken and hearings held concerning the custody.283 It may be awkward to deal with these matters in what is supposed to be a stayed action.284 Another option would be explicitly to prevent admiralty process being used directly or indirectly to obtain security in a dispute whose merits are to be settled by another tribunal. This rule could be imposed in the full range of situations covering arbitration, forum non conveniens or lis alibi pendens. Alternatively, a distinction could be drawn between situations where the dispute resolution tribunal or forum was chosen by agreement between the parties and other situations where the forum was chosen unilaterally. For the former category it can be argued that where the agree­ ment makes no provision for the defendant to lodge security, the plaintiff should not be able to use admiralty process to obtain an advantage that could have been but was not in fact bargained for. This argument does not apply where, for example, the plaintiff has selected the forum and obtained security in that forum while the defendant asserts that the forum is not convenient. If it is determined that the plaintiff must abandon the choice of forum, it does not follow that he should also have to give up the security.

189. The Commission’s View. The legislation should adopt the second option outlined in para 188, by explicitly providing that admiralty may be used to obtain and retain security even though the merits of the dispute are to be determined elsewhere, where the subject matter of the dispute lies within admiralty jurisdiction. Such a solution will do most to ensure that the award of the tribunal that decides upon the merits is satisfied, and hence that a just result is obtained. The law has a strong interest in compliance with arbitral awards duly made, and in achieving co-operation between courts and arbitrators to this end. This option is more limited in scope than the general introduction of saisie conserva­ toire, canvassed in chapter 6.285 Under the option proposed here the court always has jur­ isdiction to hear the merits. It has a discretion to decline to exercise that jurisdiction on a number of defined grounds ( forum non conveniens, lis alibi pendens and agreement that another tribunal should hear the merits). If this recommendation is accepted a further choice is required. It seems desirable that the court have some discretion as to whether it should retain the security pending the outcome of the merits in the other tribunal. It could be argued that the plaintiff is entitled to security as of right if the entire action is to be heard in admiralty, and should be similarly entitled where the merits are to be heard elsewhere. The fact that s 26 of the United Kingdom Act of 1982 (like the common law) gives a discretion can be explained as a consequence of the way in which the issue has

developed: the issue of what to do with the security has arisen in the context of a dis­ cretion to stay. Nonetheless, retention of security should remain a matter of discretion, which can be stated in a neutral way, leaving it to the court to take into account all rel­ evant circumstances.286 The court should also be given express power to make consequen­ tial orders to give effect to any award or judgment which is enforceable under Australian law.

283. eg application for sale of the res pendente lite or intervention by port authority seeking an order that the ship be moved to a different berth. 284. In The Tuyuti [1984] 2 All ER 545, 553 (Goff LJ) the possibility of such difficulties was not regarded as fa­ tal: cf Civil Jurisdiction and Judgments Act 1982 (UK) s 26(3); Admiralty Jurisdiction Regulation Act

1983 (S Af) s 5(3)(b) for similar legislative solutions to such potential difficulties. 285. See para 84-5. 286. Both English and South African courts require the plaintiff to demonstrate why the assistance of the court is required in retaining the security, although there are shades of difference in the decided cases on the

courts’ readiness to assist in respect of claims otherwise unconnected with the forum: The Tuyuti [1984] 2 All ER 545, 554 (Goff LJ); Katagum Wholesale Commodities v The M V Paz 1984 (3) SAf LR 261, 268 (Friedman J), 270 (Didcott J).

The Scope o f Statutory Rights o f Action In Rem / 145

190. Enforcing Local and Foreign Admiralty Judgments. A relevant person who appears in respect of a claim in an action in rem will be personally liable.287 If the judgment ex­ ceeds the value of the res the excess can be recovered by ordinary methods of execution; a writ of fi fa can be obtained against any of the defendant’s goods.288 Where the res was retained as security in the action in rem and was sold in that action it will no longer form part of the defendant’s property and cannot be seized on the writ of fi fa. Where bail or other security put up to secure the release of the ship proves insufficient, however, there is

no reason why the ship cannot be seized in execution.289 Until recently this was consid­ ered the only mode of execution available in the case of local in rem judgments. In par­ ticular, attempts to enforce such judgments through actions in rem met with little success. The English High Court in The Alletta held that the time for arrest was ‘before and not after a pronouncement on liability.’290 The right of arrest merged in the judgment and could not be enforced thereafter. The one major exception291 to this has always been in the case of foreign judgments in rem. Such judgments, to the extent that they give rise to

in personam liability292, can be enforced in the local jurisdiction subject to the usual pri­ vate international rules for the enforcement of foreign judgments. But under the inherent admiralty jurisdiction293 2 9 4 they have long been able to be enforced through an action in rem.29i The rationale has been that it is the duty of one admiralty court, as a matter of

international comity, to enforce the decree of another such court upon a subject over which the latter had jurisdiction.295 No such rationale existed in the case of local judg­ ments. However, the High Court of Singapore has refused to follow The Alletta: while agreeing that a claim did merge in a judgment, Justice Thean in The Daien Maru No

18 296 held that the right to security in the ship did not. Both the lien and the correspond­ ing right of arrest remained in existence. Hence an action in rem did lie to enforce a local in rem judgment (provided that adequate bail had not already been substituted for the res). The present position is therefore that, while a foreign in rem judgment can be en­ forced through an action in rem under the inherent admiralty jurisdiction, the enforce­ ment of local judgments is an open question.297

287. See para 143. 288. The Dictator[1892] P 304; Vie Gemma [1899] P 285: The Dupleix[\9\2\ P 8; The Banco [1971] P 137. 289. eg The Gemma [1899] P 285. 290. [1974] 1 Lloyd’s Rep 40, 48 (Mocatta J), referred to, without disapproval, in The Despina GK [1982] 2

Lloyd’s Rep 555, 558. 291. The only other exception to the rule against arrest to enforce a judgment is in the case of a failure to hon­ our an undertaking to give bail: in such cases arrest to enforce the resulting default judgment is expressly

permitted under the English (and most other) rules of court. See RSC (UK) O 75 r 21(2); NSW Ad Rules 1952, r 37; Vic Ad Rules 1975, r8 4 ; Qld RSC, Ο 27A r 16; Tas RSC 1965 Part IV, r 51; SA SCR, 0 39 r 33; WARSC 1971, O 74 r 19(3). 292. On the relationship between in rem and in personam liability see para 143. 293. A jurisdiction expressly preserved in England and New Zealand: Supreme Court Act 1981 (UK) s 20(c):

Admiralty Act 1973 (NZ) s 4(2). See para 193. 294. A judgment creditor who has obtained a final judgment against a shipowner by proceeding in rem in a foreign admiralty court can bring an action in rem in this court against that ship to enforce the de­ cree of the foreign court if that is necessary to complete the execution of that judgment, provided

that the ship is the property of the judgment debtor at the time when she is arrested. The Despina GK [1982] 2 Lloyd's Rep 555, 559 (Sheen J), applying The City o f Mecca (1879) 5 PD 28. See also Eurobulk Lid v Wood Preservation Industries (1979) 106 DLR (3d) 571. It is not always clear when the foreign judgment arose from a proceeding in rem. The foreign law may contain no direct equivalent to the action in rem and it becomes a question of what degree of resemblance is sufficient in order that the foreign action qualify as an action in rem. See further JK Bentil, ‘Enforcement of Judgments of Foreign Admiralty Courts’ (1984) 128 Sol J 375. 295. The City o f Mecca (1879) 5 PD 28, 32 (Sir Robert Phillimore).

296. [1985] 2 M U 90. 297. See further para 213 where it is recommended that the rule in The Alletta preventing arrest after judgment not be followed in Australia.

146 / Civil Admiralty Jurisdiction

191. An Action In Rem? Given that no inherent jurisdiction is to be retained under the Australian Act298, a number of issues arise for consideration. Should the in rem enforce­ ment of foreign judgments continue, and if so, should that right of action be extended to local in rem judgments? On the first question, it can be argued that the ‘international comity’ argument no longer provides a convincing rationale for the in rem enforcement of foreign in rem judgments. It is arguable that the ordinary methods of recognising and enforcing foreign judgments by actions in personam are adequate to discharge any duty flowing from ‘comity’ between admiralty courts in different countries. Certainly the duty provides little justification for distinguishing between foreign and local in rem judg­ ments.299 It seems clear that the two should either stand or fall together. Either the action in rem should be available to enforce all in rem judgments, foreign and local, or none at all. The arguments for and against the action in rem in these circumstances as a matter of legal principle are canvassed in the cases referred to.300 As a matter of logic the argument of Justice Thean in The Daien Maru No 18 is compelling: if a plaintiff can assert against all the world that a ship is security for an (as yet untried) claim and can arrest the ship on that basis, it should be possible to make the same assertion and arrest on the basis of a judgment. Otherwise the plaintiff is placed in a worse position through winning the

case.301 Moreover in an action in rem no one may appear, and accordingly no one may be personally liable on the judgment. Although the ranking of a plaintiff in rem to enforce a judgment is unlikely to be superior to the position of an in personam execution credi­ tor302, this should not exclude the provision of an alternative mode of execution. To per­

mit an action in rem is also consistent with the recent English move towards permitting the use of Mareva injunctions to enforce judgments.303 The one clear disadvantage of per­ mitting arrest lies in possible unfairness to innocent purchasers of the ship in question.304 Where a lien has come into existence prior to the sale of the ship to a purchaser without knowledge of the lien, and arrest takes place after sale but before judgment, the innocent purchaser at least has the opportunity to be joined or intervene on the question of lia­ bility. If arrest is permitted after judgment, the purchaser will have no such opportunity.

Nor will a mortgagee.305 In most cases however, the purchaser will be protected by an in­ demnity clause, and a mortgagee will usually have notice of the lien prior to judgment. The balance of arguments favours including a right to arrest to enforce both local and foreign admiralty judgments in rem.306 3 0 7

192. Extent of Right of Arrest. The question is what form that right of arrest should take. When discussing the right to arrest to enforce a foreign judgment in rem in The Despina G K 30\ Justice Sheen implied that the right (under the inherent jurisdiction) existed for

298. See para 193. 299. DC Jackson, Enforcement o f Maritime Claims, Lloyds, London, 1985, 166-7, 256. 300. The Alletta [1974] 1 Lloyd’s Rep 40, 46-50; The Daien Maru No 18 [1985] 2 MLJ 90, 93-5. 301. Once an action in rem to enforce a statutory lien has been commenced (through the issue of the writ) the

burden of that action runs with the ship notwithstanding any subsequent transfer of ownership, even if that transfer is to a bona fide purchaser: see The Monica S [1968] P 741. Sale of the res to a bona fide pur­ chaser after the issue of a writ of execution will, however, prevent execution upon that res: see Ritchie's Supreme Court Procedure (NSW), Butterworths, Sydney, 1984, Vol I, para 44.7.4 and authorities cited. 302. The James W Elwell [1921] P 351; Thomas (1980) para 454; Jackson (1985) 314. 303. Orwell Steel Erection and Fabrication Ltd v Asphalt and Tarmac (UK) Ltd [1984] 1 WLR 1097. See also

Devlin v Collins (1984) 37 SASR 98, 99 (King CJ), 105 (Zelling J), 116 (White J). Whether this approach will be adopted in all Australian jurisdictions remains to be seen. For discussion of the relationship be­ tween the action in rem and Mareva injunctions, see para 245. 304. The Alletta [1974] 1 Lloyd’s Rep 40, 50. 305. As was pointed out in The Alletta: ibid. 306. To similar effect Admiralty Jurisdiction Regulation Act 1983 (SAf) s 1(1) (ii) (x). The judgment in ques­

tion must be properly classified as an in rem judgment in admiralty: cf The City o f Mecca (1881) 6 PD 106 (CA) reversing (1879) 5 PD 28 (Sir Robert Phillimore) on this point. 307. [1982] 2 Lloyd’s Rep 555.

The Scope o f Statutory Rights o f Action In Rem / 147

claims against shipowners only, and that the ship still had to be the property of the owner at the time of the arrest.308 There seems little justification for these restrictions. Claims against persons other than shipowners can be brought within admiralty jurisdiction in certain circumstances (whether on maritime liens or statutory rights of action in rem). Even if the relevant person has ceased to own the ship, jurisdiction in rem exists to en­ force a maritime lien or a statutory lien (that is, a statutory right of action in rem where proceedings were commenced before sale).309 In such cases a judgment in rem may be en­ forced by sale of the ship. Even where the relevant person is the owner when judgment is given, if the owner has not appeared the only way of enforcing the judgment is against

the res.310 To impose additional requirements relating to the identity of the shipowner as relevant person after judgment which do not apply, under the lex fori, before judgment is unwarranted.3" Provided that a judgment can properly be classified as a judgment in rem in admiralty, that judgment ought to be able to be enforced by proceedings against the

res, whether it is a local or a foreign judgment. Claims for the enforcement of foreign or local judgments in rem should therefore be included in the class of proprietary maritime claims in the proposed legislation. This will effectively overcome the restrictions outlined above.312 On the other hand it is not proposed to follow the South African Act in estab­ lishing in rem jurisdiction to enforce local or foreign in personam judgments involving maritime claims. Under the present law an in personam judgment on a maritime claim does not prevent proceedings in rem being brought with respect to the claim, whether it constitutes a maritime lien or statutory right of action in rem, provided that the normal preconditions for an action in rem are satisfied. As with arbitrations, the doctrine of merger does not operate.313 It might be thought that, consistently with the position taken on arbitrations in para 189, an action in rem should be available to enforce a local or for­ eign in personam judgment. But the effect of such a provision would be to double the time limit available for proceeding in rem, in a context where in personam proceedings are much more obviously an alternative to, rather than, as with arbitrations, a preliminary to, subsequent enforcement proceedings by way of an action in rem. For these reasons no ex­

tension of jurisdiction to enforce in personam judgments is proposed.

A Residual Head of Jurisdiction?

193. Need For A Residual Clause. The remaining question to be considered is whether the heads of in rem jurisdiction proposed in this chapter should be exclusive, or whether some residual or generic jurisdiction over ‘admiralty* or ‘maritime’ cases should be in­ cluded. A residual clause would catch any part of the inherent jurisdiction of the Court of Admiralty which is not covered by the specific heads of jurisdiction. This has been done in England and elsewhere. The 1956 UK Act preserved ‘any other jurisdiction which ... was vested in the High Court of Admiralty’ before the establishment of the Su­

preme Court structure in 1875.314 Similarly s 20(c) of the 1981 UK Act preserved ‘any

308. id, 559. 309. The Monica S [1968] P 741; Re Aro Co Lid [1980] 1 All ER 1067. See Thomas (1980) para 78: Jackson (1985) 256. 310. See para 143. 311. To similar effect Thomas (1980) para 591. The point did not have to be decided in The Despina GK [1982]

2 Lloyd's Rep 555 since the requirements mentioned by Sheen J were in fact met. 312. For the distinction between proprietary and general maritime claims see para 132, 149-51. For the ex­ clusion of surrogate ship arrest under this head of jurisdiction (in common with other proprietary mari­ time claims) see para 208.

313. See the cases cited by Brandon J in The Rena K [1979] QB 377. 405-6. 314. Administration of Justice Act 1956 (UK) s 1(1). See also Admiralty Act 1973 (NZ) s 4(2); Admiralty Juris­ diction Regulation Act 1983 (S AO s l(l)(ii)(z).

148 / Civil Admiralty Jurisdiction

other Admiralty jurisdiction’ which the High Court had prior to the commencement of that Act. There is no ability to arrest surrogate ships when relying on this inherent juris­ diction. The effect of this type of ‘sweeping-up’315 provision is to force anyone wishing to know the full scope of the admiralty jurisdiction to be familiar with, or to search through, all the old cases which have a bearing on the inherent jurisdiction of the old Admiralty Court.316 A major point of the proposed legislation is to avoid the uncertainty, not to mention the work, which this creates.317 A sweeping-up clause is only necessary to pre­ serve bits of jurisdiction which either have long been in disuse and forgotten, or which are still used but for some reason have not been included explicitly as a head of jurisdic­ tion. What is forgotten or never used it seems unnecessary to preserve. What is worth pre­ serving should be explicitly preserved. In fact the cases which, it has been suggested, should be included in admiralty jurisdiction by way of a residual clause have mostly, if not entirely, related to the various tortious claims for non-physical injury discussed in para 179-84. A review of other cases within the residual jurisdiction and of the develop­ ment of admiralty has not revealed any situations which clearly ought to be within juris­ diction. If such cases should come to light (for example, as a result of further develop­ ments in the law) it is better to include them specifically by amendment to the legislation than to attempt to cater for them in advance by a vague and elusive formula the meaning of which cannot be discovered without much historical inquiry.318 No residual clause, re­ ferring to matters previously within the inherent admiralty jurisdiction should be in­ cluded in the proposed legislation.

194. An Exhaustive List? A slightly different question is whether the defined heads of admiralty jurisdiction should purport to be exhaustive of the jurisdiction conferred. The Federal Court Act 1970 (Can) s 22 is a possible model. This provides that there shall be original jurisdiction conferred over all matters falling within the Federal government's constitutional power over ‘navigation and shipping’. Without limiting the generality of this, the section then provides for greater certainty by listing specific heads of jurisdic­ tion. Similarly the CMI Draft Revision of the Brussels Convention (1985) defines ‘mari­

time claims’ in the following, non-exhaustive, way:

1. (1) ‘Maritime claim’ means any claim concerning or arising out of the ownership, con­ struction, possession, management, operation or trading of any ship, or out of a mortgage or an ‘hypotheque’ or a charge of the same nature on any ship, such as any claim in re­ spect of: (a) damage caused by the ship, whether in collision or otherwise,...

This contrasts with the exhaustive language of art 1 of the Brussels Convention itself. The main argument against defining admiralty jurisdiction in this generic way is that it leaves a penumbra of uncertainty around the core of defined heads. The contrary argument is that it gives an opportunity for judicial development of the law. In the Australian context

it would allow the courts to give an expansive reading to ‘Admiralty and maritime juris-315. The Queen o f the South [1968] P 449, 455 (Brandon J). See para 156, 171 n 148 for the use in England of the sweeping-up provision with respect to salvage and necessaries. 316. See The Aifanourios[\<)%0} 2 Lloyd’s Rep 403 for an example of how, before it could deny admiralty juris­

diction under the Administration of Justice Act 1956 (UK) s 1, a court had first to be certain that the sub­ ject matter in question would not have fallen within the jurisdiction of the pre-1875 Court of Admiralty. 317. cf the comment of 2 Western Australian practitioners: When we wish to rely upon matters that only fall within the inherent jurisdiction of the High Court

of Admiralty, we have to research great lines of contradictory cases which have, from time to time, been summarized by Judges but never so as to resolve the conflict. No sooner does one eminent Judge summarize the cases so as to prefer one line of authority, than another summarizes them, fine­

ly distinguishing with great respect the findings of the other Judge. Foss and Anderson (1976) 37. See also Zelling Report, para 5(6). 318. The 1952 Brussels Convention, art 1 lists the various ‘maritime claims’ exhaustively, without a residual clause. For the 1985 CMI Draft Revision see para 194.

The Scope o f Statutory Rights o f Action In Rem / 149

diction’ in s 76(iii) of the Constitution and thereby to enlarge the admiralty jurisdiction conferred under the proposed legislation. While there is something to be said for this, if the proposed legislation does not purport to be exhaustive the practical result will be that courts will need to canvass the 19th century case law to determine what has historically been regarded as within admiralty. Only matters defined in specific heads of jurisdiction (or specifically conferred by other legislation319) should be within admiralty.

195. Need for Ancillary Jurisdiction. The discussion in para 193-4 concerns whether there should be any independent but undefined heads of in rem jurisdiction. Ancillary jurisdiction is a separate matter, since it concerns only matters incidental to a case al­ ready within the specified heads of jurisdiction. Allowing ancillary jurisdiction to a court

exercising admiralty jurisdiction in proceedings properly brought under one or more of the heads of subject matter discussed earlier in this chapter would enable it to determine a question not falling under any of those heads if, as quite often happens, such a question

arises in the course of the proceedings.320 Where the admiralty jurisdiction is exercised by a court whose jurisdiction is otherwise general (for example, a State Supreme Court) any matter outside the admiralty heads of subject matter might be expected to be within the court’s ordinary subject matter jurisdiction. Hence the legislation dealing with admiralty jurisdiction in the United Kingdom and New Zealand conferring jurisdiction on Su­

preme Courts contains no provision conferring ancillary jurisdiction.321 It is recom­ mended in chapter 11 that concurrent admiralty jurisdiction be conferred on the Federal Court of Australia, a court whose jurisdiction is not general. The general doctrine of ‘ac­ crued jurisdiction’ developed by the High Court with respect to federal courts322 (taken in

conjunction with the federal jurisdiction in ‘associated’ matters conferred by s 32 of the Federal Court of Australia Act 1976323) will solve most demarcation problems. However it is desirable to restate the effect of s 32, so far as it relates to admiralty and maritime jur­ isdiction, in the proposed legislation, to make it clear that such an ancillary jurisdiction

over matters covered by s 76 (iii) of the Constitution exists, and this ancillary jurisdiction should be conferred on all courts exercising jurisdiction under the legislation. According­ ly it should be provided that the jurisdiction of courts extends to jurisdiction in respect of any associated matter of admiralty and maritime jurisdiction not otherwise within juris­

diction.

Restrictions on Admiralty Actions against Particular Defendants

196. Introduction. As a basic rule, admiralty jurisdiction in rem can be asserted where the res has been served with originating process within the territory of the forum.324 In personam jurisdiction in admiralty is based upon the ability to serve the defendant ac­ cording to the relevant general rules of court either within the territory or outside. The is­

sue is whether this basic position should be modified in particular situations.

319. See para 275 for discussion of how other non-federal legislation may add to admiralty jurisdiction. 320. eg a collision action in which the vessel at fault sought to argue that it drifted off its mooring due to a de­ fective anchor and sought to join the anchor’s manufacturer: see Mitsui OSK Lines Ltd v The Ship Miner­ al Transporter’[m 3 ] 2 NSWLR 564 (Yeldham J), [1985] 2 All ER 935 (PC).

321. But cf Administration of Justice Act 1956 (UK) s 3(7). 322. See para 227-8. 323. See para 228 for a discussion of this provision and the way in which it incorporates admiralty and mari­ time jurisdiction under s 76(iii) of the Constitution.

324. See para 111.

150 / Civil Admiralty Jurisdiction

197. Exclusion o f Jurisdiction over Local Residents? As a result of competition between common law and admiralty courts some restrictions remain at present on proceeding in rem against a ship owned by a local defendant.325 The approach overseas has been to re­ move these residual restrictions and allow claims ‘in relation to all ships ..., whether Brit­ ish or not and wherever the residence or domicile of their owners may be ... [and] to all mortgages ... including mortgages or charges created under foreign law’.326 The present restrictions are historical anomalies attaching only to certain heads of jurisdiction. Clear­ ly they should be abolished. Restrictions, if any, should be based on a general principle applied to all appropriate heads of admiralty jurisdiction. The argument for restricting the availability of admiralty remedies against local defendants is that made in chapter 6:

it would avoid the disparity in remedies available when a local resident is sued in respect of a truck or car on the one hand and a boat on the other.327 The restriction would at the same time resolve another issue, whether disputes involving small local pleasure craft such as runabouts or sailing dinghies, should be capable of being brought in admiralty.328 An alternative distinction would be between cases in which the relevant person (the de­ fendant, had the case been brought in personam) is resident within or amenable to the jur­ isdiction, and other cases. However, in some cases this distinction would present prob­ lems: where the decision to arrest had to be taken quickly it might be that very little could be discovered as to the identity, let alone domicile, of the relevant person. But there are other good reasons for not adopting that distinction. In such a bald form it has not been adopted overseas. It might give the appearance of discriminating against foreign ships, creating potential problems of non-recognition of the exercise of Australian admir­ alty jurisdiction. Moreover it would deprive claimants of the valuable remedy of arrest in many cases. The proposed legislation should accordingly confer jurisdiction with respect to local as well as foreign vessels.329

198. Collision Cases: Suits In Personam Against Foreign Defendants. The need to con­ sider restricting admiralty jurisdiction in relation to actions arising out of collisions of sea-going vessels arises because of the provisions of the 1952 Collision Convention.330 Ar­ ticle 1(3) bars a claimant from bringing any ‘further action against the same defendant on the same facts in another jurisdiction, without discontinuing an action already instituted’. Article 1(1) allows collision actions to be commenced at the plaintiffs option

(a) either before the Court where the defendant has his habitual residence or place of busi­ ness; (b) or before the Court of the place where the arrest has been effected of the defendant ship or of any other ship belonging to the defendant which can be lawfully arrested, or where

arrest could have been effected and bail or other security has been furnished; (c) or before the Court of the place of collision when the collision has occurred within the limits of a port or in inland waters.

The effect of art 1(1 )(b) is not to require any modification of the ordinary admiralty rule for actions in rem. However, for actions in personam the requirements are narrower than the ordinary rules for service outside the jurisdiction in respect of torts. Only with respect

325. See para 39 (mortgages), para 41 (necessaries). 326. Supreme Court Act 1981 (UK.) s 20(7). See similarly Federal Court Act 1970 (Can) s 22(3); Admiralty Act 1973 (NZ) s 4(4); Admiralty Jurisdiction Regulation Act 1983 (S Af) s 2(1). 327. See para 84. 328. See para 105. The distinction (discussed in para 115) between navigable waters to which the proposed

legislation will apply and inland waters to which it will not apply will reduce the opportunity to litigate claims in admiralty arising in connection with pleasure boats. So will the exclusion of ‘inland waterways vessels’: para 106. 329. Mareva injunctions, which started out as a remedy against foreign defendants, have been similarly gen­

eralised to cover local defendants also: see para 245. 330. International Convention on Certain Rules Concerning Civil Jurisdiction in Matters of Collision, Brus­ sels, 10 May 1952, 439 U N TS2\1.

The Scope o f Statutory Rights o f Action In Rem / 151

to a collision which occurred in the waters described in art 1(1 )(c) would service out be allowed under the Convention. The Convention has not been widely ratified.331 Australia is not a party, and has not expressed any intention of becoming a party. The United Kingdom is a party and its admiralty jurisdiction in personam reflects the terms of the

Convention.332 Although not parties, the legislation of Canada, New Zealand and South Africa also reflects the Convention requirements.333 There are difficulties in the way of recommending a similar policy for Australia. One is the question of defining the actions intended to be restricted. ‘Collision’ is not as such a head of jurisdiction proposed for the legislation. Even if it were, the fact that the proposed heads are to be read disjunctively means that the restriction could not operate simply by reference to this head without run­ ning the risk of being outflanked by actions brought under other heads. This is a drafting problem and is not insoluble. But if the restriction on in personam actions is to be effec­ tive it will also have to apply to actions brought in State and Territory courts sitting other than as admiralty courts. The restriction would thus affect all courts and, if it is to be re­ flected in the rules of court governing service out, would involve alteration to all those

rules.334 Because the restriction would only operate on foreign defendants the Common­ wealth has the constitutional power335 to impose such a restriction independently of whether it ratifies the 1952 Collision Convention. The issue is whether it should use that power. On balance the disadvantages of restricting jurisdiction outweigh the limited ben­ efits to be gained by conforming to an international scheme which is itself by no means

universally, or even widely, accepted. Accordingly no special restriction is recommended on the bringing of in personam actions in collision cases.

199. Actions In Rem Against the Crown. There is no difficulty about suing the Crown in personam in Australia and it is not suggested that admiralty actions in personam require special treatment.336 The immunity of the Crown in actions in rem was firmly established in the 19th century337 as part of the more general immunity enjoyed by the Crown at that

time. The Navigation Act 1912 (Cth) s 405A assumes this immunity and provides that nothing in that Act ‘authorizes proceedings in rem in respect of a claim against the Com­ monwealth or a State or Territory ...’ Sub-section 405A(2) does provide however, that if, through reasonable inadvertance, proceedings in rem are commenced against a govern­ ment vessel, a court may treat such proceedings as if they had been duly instituted in per­ sonam. The proposed legislation should contain a provision to similar effect.338 However the protection of such a provision should not extend to separate statutory agencies oper­ ating ships for commercial purposes.339 Indeed an argument can be made that Crown

331. There are some 20 parties to the Convention in their own right and about 30 former colonies whose pos­ ition as parties depends upon the operation of rules or practices of state succession to treaties. 332. Supreme Court Act 1981 (UK) s 22. 333. Federal Court Act 1970 (Can) s 43(4); Admiralty Act 1973 (NZ) s 6. Admiralty Jurisdiction Regulation

Act 1983 (S Af) s 3(2) only partially meets the Convention's requirements. 334. Although the territorial sea is not part of a State or Territory a tort occurring offshore would ‘occur* in the State or Territory for the purpose of the rules governing service out: Navigation Act 1912 (Cth) s 380. See

also para 113-4. 335. Under s 51(29): see para 77. Since this would be a restriction, not a conferral, of jurisdiction no problem o f ‘protective jurisdiction* arises: cf para 80. 336. See South Coast Road Metal Quarries v Whitfield (1914) 14 SR (NSW) 300 (F Ct) for extensive discussion

of suits in personam against the Crown under the Colonial Courts of Admiralty Act 1890 (UK) and an overruling of a first instance decision refusing to allow such a suit. 337. The Prins Frederick (1820) 2 Dods 451, 464; 165 ER 1543, 1548 referring to The Comus (1816); see also The Scotia [1903] AC 501; The Broadmavne [1916] P 64. There is no bar to the Crown as plaintiff proceed­

ing in rem.

338. s405A(2) will be redundant when the proposed legislation comes into force, and can be repealed, s 405A(1) needs to be retained because it deals with the effect of the 1912 Act itself. 339. The need to exempt all separate statutory bodies, whether Commonwealth or not, which operate ships commercially was stressed by RS Kneebone, Australian National Line, Submission 65 (14 November

1985).

152 / Civil Admiralty Jurisdiction

ships in commercial or trading use should also not be immune. In the absence of any evi­ dence of difficulty caused by the present rules, and in light of the difficulty in some cases of determining whether Crown ships used for various purposes are in use for commercial purposes, the present position appears satisfactory. 200. Foreign State Vessels. The question of suits in personam and in rem against foreign state-owned vessels was comprehensively dealt with in the Commission’s Reference on

Foreign State Immunity.340 Now that the relevant provisions of the Draft Bill proposed in that Reference have been enacted, nothing need be done in the proposed admiralty legis­ lation on the point.341

340. ALRC 24, Foreign State Immunity, AG PS, Canberra, 1984, para 139-44. 341. Foreign States Immunities Act 1985 (Cth) s 18.

10. Surrogate Ships and Multiple Arrest

201. Introduction. Chapters 8 and 9 have been concerned with the preconditions for the exercise of admiralty jurisdiction, and the scope of that jurisdiction, so far as the ‘wrong­ doing’ ship is concerned. The basic question considered in this chapter is the extent to which admiralty jurisdiction can be exercised against other ships or property, or through the arrest of more than one ship (or the rearrest of the same ship).

Arrest of ‘Surrogate Ships’

202. Development of Actions In Rem against Surrogate Ships. The objective of all these forms of multiple arrest, and of actions against sister ships or surrogate ships in particu­ lar, is to improve the plaintiffs chance of recovery by invoking both the jurisdictional and security aspects of the action in rem.' In the United States only the wrongdoing ship may be the subject of an action in rem. Because all maritime claims give rise to maritime liens under United States law the wrongdoing vessel can nearly always be sued and ar­ rested even though the relevant person is not the owner.1 2 Any need for surrogate ship ar­

rest is accommodated by the procedure, parallel to arrest in rem, of maritime attachment which operates against any property within the jurisdiction belonging to an absent de­ fendant.3 In Canada there is no right to proceed against any but the wrongdoing vessel4, although Mareva injunctions are apparently used with some frequency against other

ships.5 In Australia at present the position is as it was in England before 1956: under no

1. Perhaps the most famous illustration o f ‘sister ship' arrest arose out of the stranding of the Torrey Canyon off south-west England in 1967 and the subsequent pollution damage to British and French coasts. Pros­ pects for recovering for the damage from the owners of the Torrey Canyon, an American owned, Bermuda-based corporation created under Liberian law, appeared minimal even if their liability could be established. But the owners had two other ships and the British government tracked their movements.

Four months later they succeeded in arresting one, the Lake Patourde. during a brief unscheduled transit stop in Singapore. A bond of 3 million pounds was put up to secure its release. The French government was slower off the mark. Though the newly released Lake Patourde was pursued out of Singapore by agents of the French government in a motor launch they failed to serve the writ before it left territorial waters. It was not until 9 months later that they managed to obtain the arrest of the same ‘sister ship', this time in Rotterdam, where a 3.2 million pound bond had to be put up to secure its release. See The Times.

18 July 1967, 8, 21 July 1967, 1, 4 April 1968, 19. 2. G Gilmore & CL Black, The Law o f Admiralty. 2nd edn, Foundation Press, Mineola, 1975, 242 (discuss­ ing demise charterers, time charterers) and for exceptions to the basic rule, id, 594-622. 3. Federal Rules of Civil Procedure, Supplemental Rules for Certain Admiralty and Maritime Claims (US),

r B. Arrest in rem is provided for: r C. Note that r B, and to a lesser extent r C, have come under attack in the last decade or so as infringing the constitutional right to due process: see CJ Duzon, 'The Constitu­ tionality of Supplemental Admiralty Rule C' (1983) 14 JM LC 281; DG Culp, Chartering a New Course: Proposed Amendments to the Supplemental Rules for Admiralty Arrest and Attachment* (1984) 15 JM LC 353. 4. Federal Court Act 1970 (Can), s 43(2).

5. See para 245 n 5. In some of the Canadian provinces a system of general pre-judgment attachment oper­ ates as a matter of ordinary civil procedure. This can be used to detain ships in actions brought in provin­ cial courts but not in admiralty actions brought in the Federal Court even when sitting in the province in question: Maple Leaf Mills Ltd v The Baffin Bay [1973] FC 1097.

154 / Civil Admiralty Jurisdiction

circumstances can any other ship be served or arrested in place of the wrongdoing ship.6 However, actions in rem against surrogate ships have become increasingly available in comparable jurisdictions such as New Zealand, England, Singapore and South Africa. They are also permitted under the 1952 Arrest Convention: indeed, it was the express

provision for surrogate ship arrest in the Arrest Convention that led to its introduction in the United Kingdom and subsequently in other countries where the admiralty provisions of the Administration of Justice Act 1956 (UK) were adopted. In determining whether it should be available in Australia and if so, in what form, it is necessary to distinguish a number of different questions. Some aspects of actions in rem against surrogate ships, which may affect the usefulness of the facility, are discussed in chapter 12 in the context of time bars and priorities. Any overall conclusion on the utility of actions in rem against surrogate ships must also consider those aspects.

203. Permissibility o f Proceeding against Other Ships. The personification theory of the action in rem envisages an admiralty action in rem as a right of action against the wrong­ doing ship. An apparent corollary is that only the wrongdoing ship may be arrested, and a further corollary is that the value of the res represents the maximum recovery which may be obtained in the action. The procedural theory, on the other hand, ‘is based on the premise that maritime liens evolved out of the process of arrest of a vessel in order to compel the appearance of the res owner and to obtain security’.7 An apparent corollary of this view would seem to be that any property of the relevant person should be able to be arrested up to the value of the claim. English admiralty law has, in this century at least, generally preferred the procedural theory8, but there are a number of features of ad­ miralty law which are inconsistent with it.9 One such inconsistency is that admiralty al­ lowed only the wrongdoing ship to be served and arrested; its value represented the maximum recovery unless the defendant appeared.10 In The Beldis, although the matter was not put in terms of competition between the two theories, the English Court of Ap­ peal was asked to allow the arrest of any property of the relevant person.11 The argument was emphatically rejected. The President, Sir Boyd Merriman, justified his rejection by

reference to precedent but also observed:

I for one am not prepared, to quote Lord Esher’s words in R v Judge of the City of London Court'2 to ‘re-open the floodgates of Admiralty jurisdiction’ upon the public, especially when that public is an international public and I can see that the innovation would be disastrous to the prestige of the Court.13

The implications of allowing actions against any property may help elucidate the rather cryptic reference to the ‘prestige of the court’.

The action in rem was the life-boat of Admiralty jurisdiction. Should it become a purely pro­ cedural device to secure jurisdiction over a defendant there is little need to associate it with a specialist jurisdiction in Admiralty and it could spawn a common law device of arresting any property as a means of obtaining jurisdiction over a defendant who is not otherwise within the jurisdiction of the court.14

6. This was not authoritatively stated until as late as 1936: TheBeldis [1936] P 51 (CA). The correctness of the decision (or strictly speaking the obiter dictum) in The Beldis does not appear to have come up for­ mally for decision in Australia. But it is safe to assume that it would be followed. 7. DR Thomas, Maritime Liens. Stevens, London, 1980, para 8. 8. ibid: CW O’Hare ‘Admiralty Jurisdiction’ (1979) 6 MULR 195, 204-6. 9. Thomas (1980) para 8 n 40 gives examples.

10. The Banco [1971] P 137, 151 (Lord Denning MR). 11. [1936] P 51. The property in question was in fact a ‘sister ship' but the argument was cast in broad terms, attempting to rely on historical works and dicta from the 19th century cases. 12. [1892] 1 QB 273, 299. 13. The Beldis [\936\P 5\, 16. 14. O'Hare (1979) 207.

Surrogate Ships and Multiple Arrest / 155

But the situation has, since 1936, changed greatly, with the endorsement of surrogate ship arrest in the Brussels Arrest Convention 1952 and its subsequent adoption in the law of most comparable countries. The distinction between arrest of surrogate ships on maritime claims and the broader assertion of jurisdiction based on attachment of any property of the defendant is now well established. There is thus no good reason to accept Sir Boyd

Merriman P’s argument in favour of the status quo, so far as actions in rem against surro­ gate ships on maritime claims are concerned. It is not consistent with Australian interests. Other countries allow actions in rem to be brought against what are described as ‘sister ships’ or ‘associated’ ships. If the possession of these wider powers leads to analogous de­ velopments in the common law courts these will have to be judged (as the Mareva injunc­

tion has been judged) on their own merits.

204. The Definition o f ‘Surrogate Ship’. For this reason, actions in rem against surrogate ships15 should be introduced in Australia. This conclusion received universal support in the Commission’s consultations. Apparently it frequently happens under the present law that claims are not pursued before Australian admiralty courts because of the absence of surrogate ship arrest. It remains to determine what links should be required between the surrogate ship, the wrongdoing ship and the relevant person. It would be possible to re­ strict the surrogate ship to a true ‘sister ship’ of the wrongdoing ship, that is, the two ships would have to have had the same owner at the time the claim arose. In England under the 1956 Act an action could be brought against any other ship which at the time when the action was brought ‘was beneficially owned as aforesaid’.16 In its statutory context, this could have been interpreted to require that the relevant person be the owner of the

wrongdoing ship, its owner or demise charterer, or still more broadly its owner or any type of charterer. The first of these is the only situation in which the wrongdoing and the other ship are bound to be ‘sister ships’, that is, in the same ownership. But though the provision was spoken of as allowing ‘sister ship arrest’ the courts never authoritatively

decided which of these possible interpretations was correct.17 The 1981 UK Act18 adopted the broadest of the three alternative interpretations of that phrase which had been sug­ gested. It allows an action in rem to be commenced against any vessel beneficially owned by the person who is the relevant person with respect to the wrongdoing vessel. This cor­ responds to the 1952 Arrest Convention art 3(4).19 It allows an action in rem against a

15. For the term ‘surrogate ship’ and possible alternatives see para 118, 205. 16. Administration of Justice Act 1956 (UK) s 3(4)(b). 17. Although the Court of Appeal in The Span Terra [1982] 1 Lloyd’s Rep 225 decided by a majority in fa­ vour of the broadest view, Stephenson LJ observed that because the matter was heard ex parte as a matter

of urgency ‘the authority of the decision of the majority in this case will be of little, if any, more authority than the dissenting opinion of Lord Justice Donaldson' (id, 231). The same result had earlier been reached in The Permina 108 [1978] 1 Lloyd’s Rep 308 (Singapore, CA) and The Span Terza was followed in The Djatianam [1982] HKLR 427 and The Sextum [1982] 2 Lloyd’s Rep 532 (Hong Kong S Ct), where

Penlington J observed that the sort of situation in which it is necessary to choose between the views would only rarely arise (id, 535). In The Maritime Trader [1981] 2 Lloyd’s Rep 153, Sheen J felt compelled to follow what were very much dicta in The Eschersheim [1976] 1 All ER 441, 456-7 (Sir Gordon Willmer LJ) and [1976] 1 All ER 920, 925 (Lord Diplock) and reject the broadest view. See similarly The Ledesco

Uno [1978] 2 Lloyd’s Rep 99 (Hong Kong S Ct). For discussion see DR Thomas, ‘The Sister Ship Action in rem [1979] LM CLQ 158, 165-67; SJ Tabbush, ‘Arrest of Ships Owned by Charterers’ [1982] LMCLQ 585, 588-89; AM Tettenborn, ‘The Time Charterer, the One-Ship Company and the Sister-Ship Action in rem’ [1981] LMCLQ 507; SJ Hazelwood, ‘Gaps in the Action in rem - Plugged?’ [1982] LMCLQ 422.

During the passage of the 1956 Act through Parliament s 3(4) was amended. The substitution of ‘ben­ eficially owned’ for ‘in possession o f was intended to ensure that only ships in the same ownership could be arrested: United Kingdom, 194 Pari Debs (HL, 5th Series) (8 December 1955) 1239. 18. Supreme Court Act 1981 (UK) s 21(4)(ii). 19. But the jurisdictional provision in the Hamburg Rules (United Nations Convention on the Carriage of

Goods by Sea, Hamburg, 31 March 1978), art 21(2)(a), allows jurisdiction founded on the arrest of ‘the carrying vessel or any other vessel of the same ownership1. This does not seem to allow arrest of any other vessel where the relevant person is merely a charterer of the wrongdoing vessel.

156 / Civil Admiralty Jurisdiction

ship owned by the relevant person who was a charterer rather than an owner of the wrongdoing ship, thereby filling what had been called ‘a lacuna in the law’.20 It also per­ mits an action in rem against a ship which had been purchased after the sale or loss of the wrongdoing ship. A similarly broad approach should be taken in the Australian legisla­ tion.

205. The Appropriate Nexus. If the purpose of the action in rem against a surrogate ship is to persuade the relevant person to appear and to provide security, the appropriate nex­ us is not with the wrongdoing ship but rather with the relevant person. In other words, the proper nexus requirements are, first, between the claim and the wrongdoing ship21, then between the wrongdoing ship and the relevant person and finally between that per­ son and that person’s other ships. There is no reason to demand any direct nexus between the wrongdoing and surrogate ships, and the use of the expression ‘sister ship’ is erro­

neous and confusing. The appropriate rule is one which, as an alternative to allowing an action in rem to be commenced against the wrongdoing ship, allows such an action against a ship owned by the relevant person even though this person is not the owner of the wrongdoing ship.22 This will occasionally allow an action against a surrogate ship

even where there could be no action against the wrongdoing ship. The most obvious ex­ amples are where the wrongdoing ship has sunk or been sold (where there is no droit de suite).23 But another case would be where the claim is by an owner against someone using the owner’s ship on a time or voyage charter. In such a case the owner has already got

possession of his own ship, but he could, under the recommended provision, proceed against any other ship owned by the defendant. This result is only illogical if one starts from the premise that the extended right of action should only provide a substitute for a right of action against the wrongdoing ship. But the surrogate ship action is a procedural facility, and there is nothing incongruous in allowing an action in rem against another ship even though in the particular circumstances of the case no action could be brought against the wrongdoing ship, provided that there is no disjunction between the ‘relevant person’ and the surrogate ship. It is less clear that the explanation, and indeed the whole notion of surrogate ships, is consistent with the reasoning used in para 124-5 to require that there be an identity between the ship in respect of which the cause of action arose and the ship proceeded against. Part of that argument involved rejecting the proposition that once a maritime claim had been found to exist, an action in rem could be brought against any ship which belonged to the person who would be liable were the claim to be brought in personam. Yet allowing an action in rem against a surrogate ship, when there is no wrongdoing ship which could be subject to the action, seems to involve accepting the same proposition. This objection can be met if the requirements for surrogate ship ac­ tions are such as to ensure that the owner of the surrogate ship was, at the time the cause

of action arose, the owner, charterer, operator or possessor of the wrongdoing ship. An action may be commenced against any of the ships of a relevant person whose involve­ ment with the original claim was in the capacity of ship owner or charterer. Where the in­ volvement was in some other capacity, none of the ships (if any exist) of the relevant per­ son can be proceeded against. This avoids cases such as the provider of necessaries being able to be sued in rem by the shipowner simply because the provider of necessaries hap­ pens to own a yacht. There is thus a distinction between the earlier ‘identity of ship’ reas-

20. The Maritime Trader[\981] 2 Lloyd's Rep, 153, 156 (Sheen J). 21. See para 124-5 for the requirement of a 'wrongdoing ship'. 22. For the question whether more than one ship can be arrested on a particular claim see para 210. For the question of piercing the corporate veil to determine ownership for this and other purposes see para

138-41.

23. See eg the factual situation in The Siskina fCargo Owners) v Distos Compania Naviera SA [1979] AC 210. But the wrongdoing vessel which sank after the cause of the action arose but before it could be arrested belonged to a 'one ship' company and hence its owners had no other ship which could be arrested.

Surrogate Ships and Multiple Arrest / 157

oning and the surrogate ship reasoning: the two sets of reasoning are consistent with each other, as well as consistent with the general principle of jurisdiction outlined in chapter 6 . 24

206. Co-ownership. If an action in rem against any ship owned by the relevant person is to be the basic rule, two further issues arise. The first involves questions of co-ownership. The second is whether any extension should be made beyond vessels owned by the rel­ evant person to vessels under charter by that person. On the first issue there are two dif­

ferent situations to be considered.

• Surrogate Ship Part-Owned by Relevant Person. Where the other ship is only partly owned by the relevant person, neither the 1952 Arrest Convention art 3(2) nor any of the recent Acts25 allow an action in rem to be brought. It might be argued that the capacity of co-owners to seek indemnity from each other, combined with the existence of at least some legal interest of the relevant person in the ship, should be sufficient to justify allowing an action in rem in such cases. If A is the relevant per­ son and A and B own another ship in equal shares should not B be able to look to

A for reimbursement if any loss is suffered where the ship is arrested ? If it is thought unfair to the ‘innocent’ co-owner B that the ship should be liable to be ar­ rested and stand security as a surrogate ship for A’s liabilities, the position could be modified. The security value of the ship, and hence the maximum bail which

could be demanded to secure its release, could be limited to the value of A’s share.26 In other words, if A is the relevant person in a claim for $750 000 and A and B are equal owners of ship X, valued at $1 million, ship X could be arrested, but only $500 000 in bail would be required to secure its release. If sold, only

$500 000 could be appropriated to the claimant. In effect there are three options: no action in rem; an action in rem with B left to look to A for any loss that B suf­ fers; and an action in rem but with B protected to the extent described. The issue will seldom arise. There are, it seems, few ships trading internationally which are co-owned as opposed to being owned by a corporate body with two or more share­ holders. Local fishing craft are more frequently co-owned but their owners would probably only rarely also be co-owners with others of a second ship. Moreover the priorities consequences of allowing arrest in respect of one co-owner’s liabilities would be complex, whether the second or third of these alternatives was adopted.

On balance there is no sufficient warrant for departing from the position adopted in the Brussels Convention and in all relevant overseas legislation. The proposed legislation should accordingly allow an action in rem against the other vessel only where all its co-owners are relevant persons on the original claim.

• Surrogate Ship Owned by One Co-owner. Co-ownership also becomes an issue in the converse situation, that is, where A, B and C are, as equal co-owners of the wrongdoing ship ‘relevant persons' in respect of the claim and it is sought to pro­ ceed against a surrogate ship which is owned by A, or by A and B as co-owners.

Unlike the previous situation, here there is no ‘innocent’ co-owner to be affected by

24. See para 84-6, 94, 96. 25. Admiralty Act 1973 (NZ) s 5(2)(b)(ii); Supreme Court Act 1981 (UK) s 21(4)(ii); Admiralty Jurisdiction Regulation Act (S Af) s 3(7)(a)(i). 26. See a suggestion to this effect in the Italian Maritime Law Association response to question 5 of the

CM I’s 1983 questionnaire (CMI Doc No Arrest-4/1-84). The German Democratic Republic agreed (CMI Doc No Arrest-5/1-84), while the Belgian Association's response favoured allowing no arrest with­ out complete congruence of ownership (CMI Doc No A rrest-3/X II-83).

158 / Civil Admiralty Jurisdiction

the action. But neither the recent overseas Acts27 nor the 1952 Arrest Convention28 allow an action in rem in this situation. The proposed legislation should do like­ wise in the interests of international uniformity.

Accordingly, the Australian legislation should require that a relevant person be the only owner of the surrogate ship; where two or more persons are jointly the ‘relevant person’, identity of co-ownership should be required with respect to the surrogate ship. This does not mean that the proportion of co-ownership interest must be the same as the proportion of liability of the ‘relevant person’29: indeed this would rarely be the case. Identity of the persons involved should be all that is required.30

207. Surrogate Ships under Charter. The other issue is whether the category of surrogate ships which may be proceeded against in an action in rem should be extended beyond those owned to those on charter to the relevant person. The 1952 Arrest Convention does not go beyond ownership. Neither does the United Kingdom, Singapore or South Afric­ an legislation. However, the legislation in New Zealand allows an action in rem against ships on charter by demise to the relevant person.31 This appears to have come about due to a misreading of the judgment of Justice Brandon in The Andrea Ursula 32, where it was stated that demise charterers should be treated as ‘owners’ for the purposes of s 3(4) of the 1956 Act.33 3 4 This was said in the context of establishing a nexus between the wrongdo­ ing ship and the relevant person, not with reference to the nexus between the relevant person and surrogate ships. The judgment refers to the fact that the 1952 Arrest Conven­ tion allows arrest only of ‘any other ship of which the demise charterer is the legal own­

ed. 34 Because the underlying premise in that judgment was the need to bring English law more closely into line with the Convention, it seems clear that Justice Brandon did not intend to allow an action in rem to be brought against a surrogate ship where the relevant person was merely the demise charterer of the ship. On the other hand the doubtful ori­ gins of a particular provision do not prevent it from being justified as a matter of policy.

It can be argued that the rationale for extending the action in rem against the wrongdoing ship to liabilities of the demise charterer of that ship35 apply equally to actions in rem against a surrogate ship the demise charterer of which is the relevant person. The argu­ ment is not, however, persuasive. By definition a surrogate ship in such cases is a different ‘enterprise’ from the wrongdoing ship, with a different owner. It would be too great an extension of the relationship between owner and demise charterer of ship B to allow ar­

rest of that ship in respect of the demise charterer’s liabilities arising with respect to ship A.36 In the absence of any other international support for such an extension, Australian

27. See n 25. 28. Art 3(1) & (2). But note the interpretation suggested by the Italian Maritime Association: ‘if for example the ship in respect of which the maritime claim arose is owned by A, B, and C, and each of the co-owners fully owns another ship, the claimant may arrest any of those three other ships' (1983 response). Unless

intended to be read de lege ferenda this interpretation is incorrect. Art 3(1) refers to ‘any other ship which is owned by the person who was ... the owner of the particular ship'. 29. cf SK Robinson, ‘Arresting the Misconception' [1982] LMCLQ’ 261, 264. 30. Other persons who are not owners of the ship may also be liable on the claim: this is irrelevant to the

question whether the ship can be sued in respect of the liability of persons who are its owners. 31. Admiralty Act 1973 (NZ) s 5(2)(b)(ii). 32. [1973] QB 265. The case was decided in 1970 and is cited in the explanatory note to the relevant section of the Draft Admiralty Bill proposed by the Report of the Special Law Reform Committee on Admiralty

Jurisdiction (Chairman: Justice Beattie), Wellington, Government Printer, 1972, 15-6. 33. [1973] QB 265, 272, interpreting the Administration of Justice Act 1956 (UK) s 3(4). 34. id, 271 (emphasis added), referring to the 1952 Arrest Convention, art 3(4). 35. See para 131-7. 36. Other persons interested in ship B (eg as purchasers) would have to inquire not merely as to the liabilities

of the owner of ship B, with whom they are dealing, but with respect to the liabilities of other persons, who were or had been demise charterers of ship B, with respect to other ships.

Surrogate Ships and Multiple Arrest / 159

legislation should require that a surrogate ship be owned by the relevant person with re­ spect to the claim.

208. Claims not Subject to Actions against Surrogate Ships. There is general agreement that certain claims should only be able to be pursued against the wrongdoing ship itself.

• Ownership, Co-ownership, Mortgages. All the overseas Acts which allow actions against surrogate ships make an exception with respect to claims relating to owner­ ship, co-ownership and mortgages.37 The proposed legislation should follow these Acts on this point. Service on a surrogate ship will give the court in question juris­ diction to determine the merits of the claim. It is inappropriate for a court to deter­

mine the issue of title to or possession of ship A simply because its surrogate ship, B, has been served. Ship A may not be within the territory of the arresting court and there would be serious difficulties in enforcing an order for possession against ship A. A court should refrain from determining title when the res itself is not be­ fore the court unless the dispute concerns a locally registered ship (and hence its owner is a local resident38). It is true that not all claims falling within the categories of ownership and co-ownership will involve determination of title or orders for possession. But it would be complicated to try to separate the sorts of issues which

might arise into those upon which surrogate ships can be arrested and those upon which they cannot. Mortgages are excluded for similar reasons. Having lent money on the security of ship A it seems incongruous to allow the mortgagee to arrest ship B to enforce the security. In fairness to the mortgagee of ship B, the mortgage on ship A would have to rank after any mortgage on ship B. It would be a delicate question whether the mortgage on ship A should not also rank below any statutory liens which might exist on ship B at the time of its arrest.39 The right to proceed in

rem in respect of claims relating to mortgages should be restricted to the ship of which the plaintiff is mortgagee.

• Enforcement of In Rem Judgments. Somewhat similar reasoning applies to the pro­ posed head of jurisdiction allowing enforcement of judgments in rem of local or foreign admiralty courts.40 Apart from historical arguments, this head of jurisdic­ tion is best regarded as allowing the enforcement of a security interest by way of a

lien against the ship concerned. The judgment in rem extinguishes the right to pro­ ceed in rem against any other ship41 4 2 , and it is consistent with this that subsequent enforcement proceedings be limited to the ship concerned.

• Enforcement of Maritime Liens. As was pointed out in chapter 8, maritime liens are generally treated as distinct from statutory rights of action in rem, and as involving a form of inchoate security interest in the res not dependent on the commencement of proceedings in rem.*1 On this basis they are treated separately in the proposed

legislation. Consistently with this treatment it is inappropriate to allow proceed­ ings against surrogate ships in respect of the lien itself, and none of the overseas legislation does so. However there will usually be a correlative statutory right of

37. Administration of Justice Act 1956 (UK) s 3(4); Supreme Court Act 1981 (UK) s 21(4); Admiralty Act 1973 (NZ) s 5(2)(b); Admiralty Jurisdiction Regulation Act 1983 (S Af) s 3(6); 1952 Arrest Convention art 3(1). 38. See Shipping Registration Act 1981 (Cth) s 14.

39. The general question of the relationship between competing claims when a surrogate ship rather than the wrongdoing ship is arrested will be considered in chapter 12 in the context of priorities: see para 259-62. 40. See para 190-2. 41. Assuming that only one ship may be arrested with respect to a particular cause of action: see para 210.

The position of maritime liens may perhaps be different: see para 212 and n 75. 42. See para 119-20.

160 / Civil Admiralty Jurisdiction

action in rem where there is a lien43, and an action in rem against a surrogate ship may therefore be available on that basis.44 • Forfeiture. It was recommended in chapter 9 that there be no provision giving jur­ isdiction in respect of forfeiture.45 If this recommendation is not accepted there

should be no right to proceed against a surrogate ship in forfeiture cases. Because of its penal nature it would be unsuitable to allow proceedings in rem against a dif­ ferent vessel.

It will be seen that each of the claims mentioned here have what may be broadly termed a ‘proprietary’ character, either by virtue of admiralty law or otherwise. For reasons ex­ plained in chapter 9, these ‘proprietary maritime claims’ require separate treatment in the legislation46: an aspect of that separate treatment is the exclusion of any facility to pro­ ceed against surrogate ships. On the other hand, with respect to all other heads of juris­ diction (‘general maritime claims’) it is recommended that an action in rem against a sur­ rogate ship should be available. Under some heads it will be seldom used. In salvage cases the res as salved represents the limit of liability and is normally available to the plaintiff as security.47 But there may be rare cases in which the facility to proceed against a surrogate ship may prove useful (for example, where the salved res is subsequently sold), and there seems no reason to exclude its availability. None of the overseas Acts does so. 209. Actions In Rem against Other Property: Surrogate Cargo and Freight. If the right to proceed in rem is to extend beyond the wrongdoing ship, the question is whether it should also apply to surrogate cargo and freight.48

• Surrogate Cargo. No other admiralty legislation or relevant international conven­ tion has extended arrest beyond other ships. Moreover, the heads of claim within admiralty jurisdiction are such that occasions upon which ‘surrogate’ cargo could be arrested are likely to be few. On present information, there is no need to widen the ability to proceed in rem against cargo49, and no such extension is recom­

mended.

• Surrogate Freight. Freight cannot be arrested without also having a right to arrest, and actually arresting, the ship on which the freight was earned.50 The position where a surrogate ship is arrested instead of the wrongdoing ship has not been considered by either courts or writers. None of the overseas legislation suggests that the wrongdoing ship and its freight can be separated, or that the arrest of a surrogate ship allows the arrest also of its freight. The plaintiff apparently has a choice, to proceed in rem against the wrongdoing ship and its freight or against a surrogate ship (but no freight). The normal method of arresting freight (which is an intangible) is to arrest the cargo the carriage of which has earned the freight, so as to ensure that the cargo owners or consignees pay the freight owing into court rather than to the ship owner or operator. Great practical difficulties would arise in attempting to arrest the freight (and cargo) of one ship while arresting not that ship

43. See para 118 for the cases where this is not so. 44. See para 210 for the question whether multiple arrest should be possible in this situation. 45. See para 177. 46. See para 132, 149-52. 47. In contrast to the 1952 Arrest Convention, the CMI Draft Convention on Salvage (Montreal, 1981) does

not cater for surrogate ship arrest. Art 4-5(1) allocates jurisdiction over salvage disputes on a number of grounds including to the Courts of ‘the place where the property salved has been arrested’. This is the only ground upon which arrest is possible. 48. Extension of rights in rem against property other than ‘maritime’ property would contravene the underly­

ing theory of admiralty jurisdiction outlined in para 94, 96. 49. See para 109-10 on the present position with respect to arrest of cargo. 50. The Castlegate [1893] AC 38. See para 109-10 where ‘freight’ is defined and its arrest discussed.

Surrogate Ships and Multiple Arrest / 161

but a surrogate ship. It is less evident that practical difficulties would prevent the arrest of the surrogate ship and freight outstanding in respect of it. Historically, the rationale for allowing arrest of both ship and freight is that together they repre­ sented the assets at risk in the maritime adventure from the point of view of the

owner. Where one is trying to recover in respect of that adventure there is some­ thing to be said, assuming the arrest of surrogate ships is itself sound, for allowing arrest of the freight owed in respect of the surrogate ship. In those situations where

it is possible to arrest both wrongdoing ship and freight as a unit there is certain logic in allowing a surrogate ship/freight unit to be arrested instead. On the other hand there are no international precedents, and there is no evidence of any real need for such a facility. Accordingly an action against any but the wrongdoing

ship should be an action against the ship only, not the ship and its freight.

Multiple Arrest and Rearrest

210. Multiple Arrest o f Ships? A basic issue, which underlies both the action in rem against surrogate ships and the questions of multiple arrest and rearrest, is how many ships may be arrested on a single cause of action. The 1952 Arrest Convention art 3, the Supreme Court Act 1981 (UK) s 21(4) and other recent legislation all make it clear that only one ship may be arrested.51

The principle of the res as the limit of a plaintiffs entitlement... causes unease for it avails the defendant of a stratagem by which he may limit his liability, beyond that which may be sanc­ tioned by statute, and so frustrate the just expectations of the claimant. Quite simply, a pru­ dent defendant weighs the value of his ship against the potential personal liability and, if the

latter exceeds the former, witholds appearance and surrenders the ship to the court. The up­ shot is a limitation of liability which may be difficult to justify on grounds of public policy.52 The ability to arrest more than one ship on a single claim would indirectly undercut the principle of the res as the limit of liability in rem in at least some factual situations. These would only be where all of the following applied: where limitation of liability provisions did not apply or, because of the dollar amounts involved, were not relevant53, where the claim was larger than the value of the first of the defendant’s ships to be arrested, where the defendant did not appear in personam, and where a second vessel owned by the de­ fendant was also to be found within the territory. The statistics on the sale by the court of arrested vessels indicate that failures to appear and post adequate security are rare.54 There would therefore seem to be little need for the ability to arrest more than one ship. What need there is can be met, in some cases at least, by the use of a Mareva injunction to supplement the security obtained by the arrest of the first ship.55 There would also be

51. Clearly for the purposes of such rule it is critical precisely how 'claim' or ‘cause of action" is defined, eg in The Permina Samudra Λ7Κ[1977] 1 ML) 47 (Singapore, CA) a series of monthly payments were outstand­ ing under charterparty. The Court of Appeal held that the plaintiff was entitled to treat each payment as giving rise to a different cause of action even though only one substantial issue, for breach of the

charterparty, was involved. The plaintiff was therefore entitled to arrest the wrongdoing ship in respect o f one payment and a surrogate ship in respect of a second payment. For a case on the other side of the line see The Brunei 602 [1984] I ML) 227. 52. Thomas (1980) para 91. See also The Conoco Britannia [1972] 2 QB 543, 555 (Brandon J) to the effect that the limitation to the value of the res when the defendant does not appear is perhaps ‘not justified". Insofar as this dictum was directed at the authority underpinnning the rule it has been convincingly criticised by Thomas (1980) para 91. 53. In most situations the value of the ship is greater than the limitation value. 54. In England and Wales in 1980, 1016 writs and summonses were issued in admiralty and 15 ships were sold by the court. In 1981 the corresponding figures were 954 and 10: Great Britain (Lord Chancellor’s Office), Judicial Statistics 1981. HMSO, London, 1982, Table C7a. 55. The Rena K [1979] QB 337, 410. See the discussion in para 245-7.

162 / Civil Admiralty Jurisdiction

procedural questions to be resolved if a second ship could be arrested. For example, would the second ship have to be arrested within the statute of limitations or other time limit on bringing the action? Or should it be accepted that the first arrest puts the action on foot and subsequent arrests can be made outside the time period? Where two ships have been arrested by different courts in respect of the same cause of action, which court should have jurisdiction to determine the merits, and in what proportions should the pro­ ceeds of the two ships contribute to meet any liability found to exist? It may well be that machinery could be devised to deal with these issues, but no worked out regime for mul­ tiple arrest in admiralty exists at present. Rather surprisingly, however, the CMI draft re­ vision to the Brussels Arrest Convention does permit multiple arrest up to the value of the claim. Art 5(2) provides that:

Any other ship which would otherwise be subject to arrest in respect of the same maritime claim shall not be arrested unless: (a) the nature or amount of the security already obtained in respect of the same claim is inad­ equate ,..56

This provision occurs in a text which defines arrest to include Mareva injunctions and similar ‘restrictions on removal’ of a ship, and which specifies the conditions for arrest of a ship at the time of the arrest, not (as has historically been the case with admiralty juris­ diction) at the time the action is commenced.57 The latter is probably essential if any re­ gime for multiple arrest is to be introduced: the former is, for other reasons, controver­ sial.58 But the CMI draft revision is just a draft: until provisions for multiple arrest be­ come definitively accepted at the international level it is premature to introduce them in Australia. The present position, which combines the jurisdictional and security conse­ quences of the action in rem with the possibility of enforcement in personam (including Mareva injunctions) against the relevant person, is adequate.

211. Rearrest of the Same Ship. The question whether and in what circumstances an ar­ rested ship can later be rearrested on the same claim is one that has caused some diffi­ culty at common law. The issue is whether the proposed legislation should define the right to rearrest before judgment. At common law it appears that the mere release of a ship from arrest does not itself prevent rearrest.59 If bail has been given to the value of the claim or of the ship60, however, the basic rule is that the ship is wholly released from the action, and the res may not be rearrested on that cause of action.61 The same is prob­ ably true where security is given by way of a contractual guarantee rather than by bail.62

Nevertheless there are exceptions to the basic rule.63 Rearrest, it seems, can take place be­ fore judgment despite the provision of bail (or other security) • where a surety becomes insolvent; • where the original proceedings are discontinued prior to judgment and the plaintiff

pays the defendant’s costs relating to the original arrest; or

56. CMI Doc LIS/Arrest 30 (1985). Art 5(2)(b) allows arrest of another ship where security or other under­ takings given in relation to the first ship prove unreliable. 57. id, art 1(2) (definition of ‘arrest’), art 3(1 )(d), (2) (conditions for arrest). The latter provisions do not ex­ clude statutory liens entirely, since art 3(3) allows arrest of a ship not owned by the relevant person if un­

der local law the ship can be sold by the court to meet the liability. 58. As DJL Watkins, Secretary, British Maritime Law Association, pointed out: Submission 49 (12 June 1985). 59. DC Jackson, Enforcement o f Maritime Claims, Lloyd’s, London, 1985, 166-7. 60. Together with costs: Thomas (1980) para 513. 61. See ibid and the authorities cited, in particular The Kalamazoo (1851) 15 Jur 885, 886; The Wild Ranger

(1863) Br & L 84; 167 ER 310; The Point Breeze [1928] P 135, 139-141. These decisions were approved in both The Alletta [1974] 1 Lloyd’s Rep 40, 46-50 (Mocatta J) and The Daien Maru No 18 [1985] 2 MLJ 90 (Thean J). 62. Thomas (1980) para 516. 63. id, para 513. In addition to the authorities cited by Thomas, see The Arctic Star [1985] TLR 70.

Surrogate Ships and Multiple Arrest / 163

• at the court’s discretion, where the original bail is discovered to be insufficient (as, for example, in The Hero64, where a clerical error was made in entering the claim and bail was consequently set at too low a level).65

There is no reason to think that any different rules would apply under the proposed Act and Rules if, as is the case in the United Kingdom66, no mention is made of rearrest. If, as is desirable, the Rules specify a right to seek the discharge of a warrant, any attempt to

rearrest will be open to challenge, and the courts will no doubt require justification for the rearrest along the lines of the existing principles. The question is whether this repre­ sents an adequate provision for rearrest. An alternative would be to spell out the right to

rearrest before judgment, and the circumstances in which that right can be exercised. That appears to be the intention of the 1985 CMI draft revision of the 1952 Arrest Con­ vention. Article 3(3) of the 1952 Convention provides that there is to be no rearrest (or bail or other security given more than once) except where any earlier bail has already been released at the time of the second arrest or where ‘good cause' can be shown. Article

5 of the draft revision is more precise and to some extent reproduces the common law principles outlined above. It allows rearrest where the nature or amount of the existing security is inadequate, where the person who has given the existing security cannot or is unlikely to be able to fulfil the bail obligations, or where the earlier security has been re­ leased on reasonable grounds or in circumstances such that the claimant could not rea­ sonably have prevented the release. The main advantage of such an approach is that it would remove any lingering uncertainty on the right to rearrest, and clarify its extent. The main disadvantage would be a loss of flexibility, including the danger of not antici­ pating all possible circumstances in which rearrest should be permitted. It is better to leave the court with a discretion whether to permit rearrest (and to confer the power to impose conditions on the right to rearrest), while specifying the most important of the grounds on which rearrest is likely to be permitted, that default has been made in the per­ formance of a guarantee or undertaking given to procure the release of the ship. A pro­ vision to this effect should be included in the proposed legislation.

212. ‘Rearrest’ of a Different Ship. If rearrest can take place in certain circumstances in a case where a surrogate ship could have been arrested in the first place, it can be argued that there is no reason for not allowing the arrest of a surrogate ship the second time around. Conversely, if the initial arrest was of a surrogate ship, and a surety becomes in­

solvent, there should be no objection to arresting the wrongdoing ship. The Admiralty courts have, however, long insisted that only one ship may be arrested on any single cause of action. Even where rearrest has been allowed it has always been rearrest of the ship initially arrested. In the United Kingdom before 1956, that ship was the ‘wrongdo­

ing’ ship.67 Since the introduction of sister ship arrest by the Administration of Justice Act 1956 (UK), the ship could be either the ‘wrongdoing’ ship or another ship, but not more than one ship.68 This accords with art 3 of the 1952 Arrest Convention. The Su-

64. (1865) B & L 447; 167 ER 436. In that case an application seems to have been made for leave to arrest the ship; ibid. There appears to be no rule requiring leave prior to arrest, however: see The Arctic Star [1985] TLR 70; cf The Point Breeze [ 1928] P 135, 141. 65. No arrest to increase bail can take place after judgment but prior to the amount of the claim being ascer­

tained: The Point Breeze [1928] P 135. It also seems unlikely that rearrest simply to ‘top up' bail will be permitted: id, 142. 66. cf Admiralty Jurisdiction Regulation Act 1983 (S AO s 3(8), which expressly forbids the arrest of property (or giving of security) more than once in respect of the same maritime claim. 67. See The Banco [1971] P 137, 150-1 (Lord Denning MR). 68. id, 532-4 (Lord Denning MR); 536-7 (Megaw LJ); 540 (Cairns LI).

164 / Civil Admiralty Jurisdiction

preme Court Act 1981 (UK) s 21(8) has now expressly enacted that rule.69 The result ap­ pears to be that in the United Kingdom the ‘rearrest’ of a second ship would not be per­ mitted, though there is little authority directly in point.70 The same result could be expect­ ed under the proposed Australian legislation, particularly if it included an equivalent of s 21(8). If rearrest is to be extended to ships other than that originally arrested, therefore, the legislation should say so expressly. Article 5 of the 1985 CMI draft revision of the Ar­

rest Convention not only spells out a right to rearrest (as mentioned in para 211) but also extends that right to the ‘rearrest’ of a different ship in each of the instances specified. Thus, where a ship has been arrested and released or security has been given to secure a maritime claim, any other ship which would otherwise be subject to arrest on that claim can be arrested if the nature or amount of the security already obtained is inadequate, if the person who has given the security is not able, or is unlikely to be able, to fulfil the se­ curity obligations, or if the ship earlier arrested or security previously given was released either by the claimant upon reasonable grounds or because it could not reasonably be prevented.71 The problem with such an approach is that it undercuts the rule against mul­ tiple arrests. It is true that multiple arrests could, as in The Banco 72, take place all at once. ‘Rearrests’ would presumably have to take place one after another until bail was adequate. It might be possible to restrict the ‘rearrest’ of other ships, for example, to sit­ uations of genuine mistake in accepting the initial bail. But the more restricted the rule the less likely it is to have any practical operation, and a less restricted rule will clash at least to some extent with the rule against multiple arrest.73 This problem does not arise with the CMI draft revision since, as pointed out in para 210, art 5(2) of that draft pro­ poses to allow multiple arrests. It has been recommended that that proposal not be fol­ lowed in Australia. If the rule against multiple arrests is retained, the restriction of ‘re­ arrest’ to the ship originally arrested is desirable in the interests of consistency. Accord­ ingly the right to rearrest a ship should be restricted to the ship originally arrested. How­ ever it is also desirable that certain limited exceptions be established to this general rule. Where the initial arrest is set aside (because the wrong ship was arrested) a second arrest is permissible74, and this should be expressly stated. In one other situation it may be that rearrest of a different ship is permitted under the present law. Where a surrogate ship is arrested in respect of a claim which also gives rise to a maritime lien, it may well be that the maritime lien is not extinguished by the arrest, as distinct from the satisfaction of the

69. Sub-s(8) forbids not only the arrest of, but also the service of a writ in rem upon, a second ship: where, as regards [general maritime claims), a ship has been served with a writ or arrested in an ac­ tion in rem brought to enforce that claim, no other ship may be served with a writ or arrested in that or any other action in rem brought to enforce that claim. In The Stephan J [1985] 2 Lloyd's Rep 344, Sheen J held that s 21(8) should be read as excluding service upon or arrest of a second ship only where the ship previously served or arrested was a ship against which that action in rem could be brought. Thus where, as in The Stephan J, a ship that could not be sued on the relevant claim was mistakenly arrested, s 21(8) did not prevent later service on and arrest of a sec­ ond, correct, ship. 70. The reasoning of Sheen J in The Stephan J [1985] 2 Lloyd's Rep 344 is not relevant since, unlike the situa­

tion in that case, the initial arrest in a typical 'rearrest' aition will have been proper, but the bail or other security will have failed for one of the reasons outlined in para 211. Sheen J did not refer to the possibil­ ity of any other exception to s 21(8), and this may tend to support the argument that s 21(8) forbids re­ arrest of a different ship. 71. CMI Draft Revision, art 5(2). 72. [1971] 1 All ER 524. There, seven ships were arrested on the same day.

73. There are other consequential problems to be resolved: eg, would the statutory lien against ship A be ex­ tinguished by the ‘rearrest’ of ship B? 74. The Stephan T [1985] 2 Lloyd’s Rep 344.

Surrogate Ships and Multiple Arrest / 165

liability in question.75 If the lien is not extinguished, it would follow that arrest of the ship subject to the maritime lien ought to be possible. Consistently with the position taken so far in this Report that the law of maritime liens should be left to the common law76, this possibility for rearrest should be left open. Finally, where an arrested ship has broken arrest and custody of it has not been regained it is unjust to deprive the plaintiff

of the right to arrest another ship, and provision for rearrest in such cases should also be made.

213. Arrest after Judgment. The conflicting case law on whether arrest is permissible af­ ter judgment in the case has been entered was discussed briefly in para 192, in the context of the enforcement of in rem judgments by subsequent proceedings in rem. The English High Court in The Alletta held that arrest was permissible only prior to judgment: there­

after only in personam enforcement measures (if these are available), or arrest in some other jurisdiction which allows enforcement of foreign in rem judgments77 7 8 , was permis­ sible. On the other hand, the High Court of Singapore has refused to follow The Alletta.1* The rule in The Alletta is anomalous in principle and undesirable in practice. It is anom ­ alous that a plaintiff in an action in rem should be in a worse position after winning the case than before. It is difficult to reconcile the rule with the court’s inherent power to en­ force foreign in rem judgments: why should local judgment creditors be in a worse pos­

ition? The rule is undesirable in practice because it places a premium upon arrest, where­ as the aim of a modern admiralty jurisdiction should be to encourage reliance on the jurisdictional aspects of the action in rem while avoiding actual arrest unless this is really necessary.79 The consensus of opinion expressed to the Commission supported the view

that the rule in The Alletta should be abrogated.80 It should be sufficient to provide in the proposed Admiralty Rules that a ship may be arrested either before or after judgment has been given in the proceeding.

Procedural Consequences

214. Commencing Proceedings against Several Ships. It remains to consider a number of procedural issues arising from the conclusions in this chapter. The first concerns the prac­ tice which has developed in England of commencing proceedings in rem against more than one ship. That is to say, the writ lists all the arrestable ships with respect to the cause

of action in question, and is then amended before or immediately after service to strike out all but the ship finally selected for service.81 Since a writ issued in respect of a ship

75. Text discussions of the extinction of maritime liens do not list unsatisfied judgments against surrogate ships as a ground of extinction: eg Thomas (1980) ch 11. The emphasis with maritime liens has always been upon requiring actual satisfaction of the liability before the lien is extinguished (apart from laches etc): id, para 548.

76. See para 119-23. 77. [1974] 1 Lloyd’s Rep 40. cf The Despina GK [1982] 2 Lloyd s Rep 555 (Sheen J) (which, however, refers to The Aliena without disapproval). 78. The Daien Maru No 18 [1985] 2 MLJ 90. For comment see DCJ. 'Arrest after Judgment" [1985] LM C LQ

186.

79. The strongest argument in favour of the rule against post-judgment arrest is that thereafter other parties with an interest in the ship have no opportunity to appear or intervene: see Vte Aliena [1974] 1 Lloyd’s Rep 40, 50 (Mocatta J). Apart from the possibility that service on the ship will have put them on notice, the court’s powers, including powers to order that other interested parties be given notice of the claim,

and to set aside a default judgment, are sufficient to resolve most difficulties. 80. This view was expressed eg by Justice B Sheen, Submission 74 (6 January 1986) 1-2. See also Jackson (1985) 166. 81. KC McGuffie, DA Fugeman & PV Gray, Admiralty Practice. Stevens, London, 1964 and supp 1975,

para 157, 262. See n 83.

166 / Civil Admiralty Jurisdiction

can be served on the ship irrespective of a later change of ownership82, the effect of this practice is to establish what might be described as a ‘contingent statutory lien’ in respect of all the ships named in the writ, the contingency being actual service on the ship in question. Nonetheless the practice is expressly preserved by s 21(8) of the Supreme Court Act 1981 (UK):

this subsection does not prevent the issue, in respect of any one such claim, of a writ naming more than one ship or of two or more writs each naming a different ship.83

Although it could be argued that the proliferation of statutory liens is undesirable, the practice does have the advantage of allowing persons interested in any of the ships named, through a search in the relevant court, to discover that a writ is pending but not served.84 The practice would also be difficult to prevent (especially in the form of the is­ sue of separate writs). From an Australian point of view, there seems no need to do so, and the effect of the proviso to s 21(8) of the 1981 UK Act should accordingly be achiev­ ed through a provision in the proposed Admiralty Rules.

215. Amendment o f Writs. Courts which exercise admiralty jurisdiction have available to them their general powers to amend writs and other pleadings, including amendments which have the effect of adding or substituting a party or adding a new cause of action. The principles on which these powers are to be exercised in in personam actions (for ex­ ample, in cases where a new action against the party added, or new proceedings on the additional cause of action, would be time-barred) are reasonably well settled. However actions in rem have as their object both the obtaining of jurisdiction and security against the res and, if the relevant person appears, the obtaining of jurisdiction and the possibil­ ity of subsequent enforcement action against the defendant personally.85 This dual aspect of actions in rem is capable of presenting problems when it is sought to amend a writ to substitute a different ship, or a different person as the relevant person in respect of the claim. For example, in The Kusu Island86, the High Court of Singapore allowed an amendment to add two surrogate ships to a writ in rem, in a case where the wrongdoing ship which was originally named had been broken up, and despite the fact that the time limit in respect of the cause of action had expired. The Court treated the action in rem as a procedural device to acquire jurisdiction over the defendant, so that the amendment did not, in its view, have the effect of adding a new party.87 But in that case the defendant (the relevant person in respect of the claim) was at all times the owner of the three ships in question. It would be a different matter if a ship was to be added after time had ex­ pired which was then under new ownership, especially if the effect if the amendment were

82. The M onicaS [1968] P 741; Re Aro Co Ltd [ 1980] I All ER 1067. 83. For the substantive effect of s 21(8) see para 212. The practice of naming several ships had earlier been approved in The Banco [1971] P 137; The Berny [1979] QB 80. 84. For admiralty registers see para 292. 85. See para 143. 86. [1985] 1 MLJ 343. 87. id, 346.

Surrogate Ships and Multiple Arrest / 167

to be treated as retrospective.88 On the other hand it is undesirable to adopt rigid rules in this area, given the difficulty that can sometimes exist in discovering the identity of the relevant person and tracing surrogate ships. It should be sufficient to provide, in the pro­ posed Admiralty Rules, that the court’s powers of amendment of process and joinder of parties extend to substituting for a defendant or a ship identified in the initiating process some other defendant or ship, provided that, unless the court otherwise orders, the pro­ ceeding should be treated as having been commenced against the substituted ship at the time when the order for substitution was made. 216. Multiple Service. In addition to prohibiting multiple arrest of ships, s 21(8) of the

Supreme Court Act 1981 (UK) prohibits multiple service on ships, whether in the same proceeding or in separate proceedings on the same cause of action. Although this rule is generally the appropriate one89 (assuming, as recommended in para 210, that multiple ar­

rest is not to be permitted), there may be circumstances when it works unfairly against a plaintiff. For example, ship A is served with a writ in rem but, due to undertakings given on its behalf, is not arrested. Ship A is then broken up or disappears. The plaintiff will then be precluded from arresting ship B (belonging to the same person as ship A), be­

cause, ship A having been duly served, no other ship can be served on the same cause of action, and because arrest without service is excluded. To overcome this difficulty it should be possible to serve a second ship with initiating process in respect of a particular cause of action if the service on the first ship has been set aside, or the proceeding so far as it concerned that ship discontinued, dismissed or struck out.

88. It is unclear whether amendments adding a new party are retrospective in effect or not. The English Court of Appeal has recently refused to follow dicta in L iff v Peasley [1980] 1 All ER 623, 643 (Brandon LJ) to the effect that they are not: Ketteman v Hansel Properties Ltd [1985] 1 All ER 352. See also Liptons Cash Registers and Business Equipment Ltd v Hugin ICB) Ltd [1982] I All ER 595, 605 (Hawser QC); Leadbitter

v Hodge Finance Ltd [1982] 2 All ER 167, 173 (Bush J). The Australian authorities are confused. Some clearly assume the retrospective effect of adding a party: Archie v Archie [1980] Qd R 546 (Full Ct); Perrett v Robinson [1985] 1 Qd R 83, 86-7 (Connolly J). There are, however, statements in a number of cases that tend the other way: J Robertson ά Co Ltd (In Liquidation) v Ferguson Transformers Ply Ltd (1970) 44 ALJR 441, 444 (Walsh J); John Robertson & Co Ltd (In Liquidation) v Phillips Industries Ply Ltd (1973) 1

ALR 21, 30 (Menzies J); Perrett v Robinson [1985] I Qd R 83, 92-3 (McPherson J); Booth v Peko Mines (NL) (1978) 22 ALR 94 (Toohey J); Neilson v Peters Ship Repair Ply Ltd [1983] 2 QdR 419 (Full Ct). Some decisions appear to rely upon both lines of authority: Stout v RA Wenham Builders Ply Ltd [1980] 1 NSWLR 426 (Sharpe, M). Liff v Peasley has been reversed in England by statute: Limitation Act 1980 (UK) s 35. 89. In particular it avoids different courts acquiring jurisdiction by service over the same cause of action.

11. The

Allocation of Admiralty Jurisdiction

217. Introduction. This chapter discusses which courts should exercise the Australian admiralty jurisdiction. It first sets out which courts presently exercise that jurisdiction. The position in a number of other countries is briefly described for comparative pur­ poses. The constitutional constraints on Commonwealth re-allocation of jurisdiction are

outlined. Several options for allocating jurisdiction are briefly canvassed and rejected, followed by a discussion of the allocation of admiralty jurisdiction in personam. The main part of the chapter focuses on the two possible ways of allocating in rem jurisdic­ tion, either to State and Territory Supreme Courts alone or to those Courts concurrently with the Federal Court, and on related questions of interstate service and arrest. The

question is considered whether some limited or more general in rem jurisdiction should be given to any courts below the level of Supreme Courts. Finally the question of appeals is dealt with.

The Present Australian Position

218. Courts Vested with Admiralty Jurisdiction under the Colonial Courts of Admiralty Act 1890 (UK). The operation of the Colonial Courts of Admiralty Act 1890 (UK) in vest­ ing Australian courts with admiralty jurisdiction was discussed in some detail in chapters 2 and 3. It is sufficient to summarise the position here. It is clear that the High Court and the Supreme Court of each State and Territory presently qualify as Colonial Courts of

Admiralty under that Act. In addition, it is possible that other superior courts established by statute with original unlimited civil jurisdiction in particular matters (for example the Federal Court) also qualify as Colonial Courts of Admiralty. It is also possible that cer­

tain intermediate courts with unlimited civil jurisdiction in particular matters (for ex­ ample the District Court of Western Australia) so qualify. On the other hand, although there is power under s 3(b) of the Act to confer limited admiralty jurisdiction on lower courts, this power can probably only be exercised by the Commonwealth, not the States.

The validity of the Broome Local Court Admiralty Jurisdiction Act 1917 (WA), the only attempt to exercise this power, is therefore doubtful. The position with appeals to the Privy Council, before the Australia Acts 1986 (Cth and UK), was doubtful, but if those appeals survived they have now been abolished.

219. The Admiralty Case-Load of Australian Courts. The following table is a summary of statistics supplied in early 1984 by the Registrars of the various courts concerned. They do not cover litigation involving maritime matters in the general jurisdiction of the court: they deal only with actions actually commenced in admiralty. The large overlap between

the admiralty and ordinary jurisdictions means that a plaintiff will often have a choice of

170 / Civil Admiralty Jurisdiction

jurisdiction in which to proceed.1 No estimate has been attempted of cases which could have been brought in admiralty but were not.

TABLE

Admiralty Proceedings in Australian Courts, 1974-19832 Total Actions 1974-1983

High Court

NSW Supreme Court

Vic

Supreme Court

Qld

Supreme Court

Tas

Supreme Court

SA

Supreme Court

WA

Supreme Court

Commenced 3773 6084 415 6 188* 47 8 9 45s 120"

Coming to Trial 2 N/A 0 12 0 3 12

Involving Local N/A N/A N/A 94 2 11 52

Craft

These figures largely speak for themselves. Over the decade surveyed the annual number of admiralty actions commenced averaged about 140, although there were considerable fluctuations. Of the admiralty actions commenced, very few went to trial. In Queensland over the period covered, about 6.4% of actions commenced went to trial; the correspond­ ing Victorian figure was nil. Admiralty appeals were even rarer.10 1 1 The use of district regis­ tries and hearings outside the State capitals was minimal or non-existent in New South Wales, South Australia and Victoria. On the other hand, admiralty matters were less con­ centrated in the other States, in particular in Queensland." The distribution of admiralty matters in 1983 between States (allocating actions commenced in the High Court to the State of the Registry in which the action was commenced) was as follows: New South Wales 39, Victoria 26, Queensland 17, Western Australia 16, Tasmania 4 and South Aus­ tralia 1. It should be remembered that the statistics apply to admiralty in its present unre-

1. For examples of conflict due to one party wishing to proceed in admiralty, the other in the ordinary juris­ diction, see Union Steamship Co o f New Zealand Ltd v The Ship 'Caradaie' ( 1937) 56 CLR 277; Avis Rent- A-Car System Ply Ltd v Bill unreported, NSW Supreme Court, 9 June 1972 (MacFarlan J). 2. No statistics are available for the Supreme Court of the Northern Territory, nor for the Broome Local

Court, though apparently the latter has, in recent years at least, had no cases in its admiralty jurisdiction. 3. The overwhelming majority of these actions (317) were commenced in the Melbourne Registry. No mat­ ters were commenced in the High Court in the Canberra, Hobart, Adelaide or Darwin Registries. The High Court will usually remit admiralty matters to the appropriate State Supreme Court. Two matters

went to the High Court on appeal. 4. No actions were commenced in the District Registries of Newcastle and Wollongong. O f 18 matters com­ menced in 1982, 7 involved local craft. In the view of Registry staff the marked decline in the number of actions commenced in the Supreme Court over the course of the decade was due to the fact that most

cargo claims were pursued in the Commercial Causes List and fewer in personam actions were com­ menced in Admiralty. Improved communication systems in Sydney Harbour greatly reduced the number of collisions. 5. Cases have on occasion been adjourned to the Supreme Court sitting at Sale. Approximately 25% of the

actions commenced in admiralty were within the limits of the jurisdiction of the Victorian County Court. 6. Of these actions, some 83 were commenced in the District Registries of Rockhampton and Townsville, and three-quarters of those actions involved local vessels. 7. Three were commenced in District Registries. 8. None of these actions were heard on circuit. 9. All admiralty matters are dealt with by the Supreme Court in Perth. Approximately 20% of the actions

commenced in admiralty were within the limits of the jurisdiction of the District Court. 10. Most courts reported no admiralty appellate work, and those that did (Qld & NSW) reported only one or two instances during the decade surveyed. China Ocean Shipping Co v State o f South Australia (1979) 145 CLR 172 went to the High Court on a case stated, not on appeal. 11. As the Queensland Branch of the Maritime Law Association pointed out: Submission 6 (5 October 1983),

reprinted in (1983) 1(3) M LA A N Z Journal 23, 25. During the decade 57% of admiralty actions com­ menced in the Brisbane Registry.

The Allocation of Admiralty Jurisdiction / 171

formed and unsatisfactory state. No estimate has been attempted of the volume of busi­ ness whch might flow to courts exercising a reformed subject matter jurisdiction. The British statistics set out in para 222 suggest that even a reformed admiralty jurisdiction will not require a great deal of judicial time. Even if it is correct to say that ‘a large pro­ portion of the commercial causes list of the Supreme Court [of Victoria] involved mari­ time law’12, it should not be assumed that all or most of these matters will be brought in the reformed admiralty jurisdiction.

220. Debate on the Allocation o f Business between Courts. It has been said that until the 1960s Federal Parliament proceeded on no fixed principle in deciding which matters should be allocated to federal or State courts: ‘ad hoc decisions were made in most cases without any real thought given to this problem’.13 Since the 1960s there has been a vigor­ ous debate on the question14, but no consensus has emerged on the principles which should govern the selection of courts to deal with federal matters. For example, it has been said that the Commonwealth should not confer exclusive jurisdiction on any court,

State or federal, but should confer only concurrent jurisdiction.15 On the other hand, it has been suggested that the ‘conferring of further jurisdiction, original or appellate on the Federal Court should be avoided’.16 The way in which admiralty and maritime jurisdic­ tion is allocated is of concern not only to those directly interested in maritime matters, but also as an aspect of the larger debate on the allocation of jurisdiction and on the possibilities for a unified Australian court system. It is useful to set out briefly some of the arguments in this larger debate. Arguments favouring giving some federal matters to

federal courts have included the following:

• The basic principle is said to be that ‘judges who are called upon to interpret and apply statutes should be appointed by governments responsible to the parliaments which passed those statutes ... On principle ... federal judges should interpret and apply federal laws’.17 This has been criticised as being ‘in truth a rejection of the principle of judicial independence’, there being no evidence to suggest that judges appointed by the States have lacked either the intellectual capacity or the impar­ tiality to interpret federal statutes.18 Even where some force is accorded to this

basic principle it is said that ‘it cannot be an absolute’.19 • In conferring jurisdiction on State courts the federal government has to accept them as they are ‘with all the variations between them and their limitations and

traditions’.20 Thus there are differences in the rules of evidence, in the rules of

12. Note, 'Ship May Come Home for Maritime Lawyers' (1983) 57 Law Inst J 128, 129. 13. MH Byers & PB Toose, 'The Necessity of a New Federal Court' (1963) 36 Aust LJ 308, 309. See also R Else-Mitchell, 'The Judicial System — The Myth of Perfection and the Need for Unity’ (1970) 44 Aust LJ 516, 521-3.

14. See eg R Else-Mitchell, Burying the Autochthonous Expedient?' (1969) 3 Fed L Rev 187: G Barwick, ‘The State of the Australian Judicature' (1977) 51 Aust LJ 480; MM Helsham, 'Difficulties Caused by a Dual System of State and Federal Courts' ( 1978) 52 Aust LJ 466; L Street, 'The Consequences of a Dual System of State and Federal Courts' (1978) 52 Aust LJ 434: L Street. 'Towards an Australian Judicial Sys­ tem' (1982) 56 Aust LJ 515; N Bowen, Federal and State Court Relationships' (1979) 53 Aust LJ 806; W Campbell, 'The Relationship between the Federal Court and the Supreme Courts of the States' (1979) 11

V Qld LJ I ; H Gibbs, ‘The State of the Australian Judicature' (1981) 55 Aust LJ 677; A Rogers, 'State/Federal Court Relations' (1981) 55 Aust LJ 630; F Burt. An Australian Judicature' (1982) 56 Aust LJ 509; FM Neasey, "Comment Upon Proposals for an Australian Judicial System' (1983) 57 Aust LJ 335; AR Moffit, Ά Comment on the Proposal for Creating an Australian Court of Appeal' (1983) 57 Aust

LJ 167.

15. Gibbs (1981) 679. See also Rogers (1981) 648. 16. Campbell (1979) 18. 17. EG Whitlam, Comment in Discussion, (1963) 36 Aust LJ 327. 18. Gibbs (1981) 677-8. 19. Burt (1982) 509. 20. Byers & Toose (1963) 313.

172 / Civil Admiralty Jurisdiction

court, in rights of appeal, rights to jury trial, and in the availability of manpower and suitable premises to hear federal matters.21 If an attempt is made to avoid problems by enacting federal procedural rules, the result may be to transfer the area of conflict to the issue of what matters are ‘federal’ for the purposes of those procedural rules.22 In answer to this it is suggested that these problems are more theoretical than real, and that few anomalies actually arise in practice.23

• Uniform law rapidly ceases to be uniform when interpreted by a number of differ­ ent courts.24 The benefits of national legislation may tend to evaporate, yet there are many areas in which a uniform national regime is highly desirable.25 Critics of this argument say that loss of uniformity ‘has not been the Australian experience’.26 The High Court’s position as final arbiter is sufficient to guarantee uniformity.27 The need for uniformity has itself been challenged. One would have thought that in some matters the High Court would welcome the assistance of varying ap­ proaches ... In a country as vast as Australia is not too much emphasis being placed on the need for rigid uniformity?’28

• There are territorial limits on the operation of a State court’s process, orders and officials; the Federal Court in these respects operates Australia-wide.29 On the other hand it can be argued that the availability of the Service and Execution of Process Act 1901 (Cth) eliminates serious problems in this area. To the extent that it does not, the answer is to amend that Act rather than confer jurisdiction on the

Federal Court.30

• The areas of law in which the Federal Court is given jurisdiction are or should be special, in a sense other than having been enacted by the federal Parliament. This could mean ‘requiring special expertise’ or ‘of special interest to the Common­ wealth’. But it can be said that it is far from evident what is or is not special in the required sense. At present, for example, income tax matters are given at first in­ stance exclusively to State Supreme Courts, copyright concurrently to the Federal Court and Supreme Courts and trade practices exclusively to the Federal Court.

Even if the requirement for expertise is accepted, it can be argued that the appro­ priate solution is not to confer jurisdiction on a specialist court but rather ‘the set­ ting up of ad hoc specialist divisions within the Supreme Courts’.31

Independent arguments against Federal Court jurisdiction are also made. These include the following:

• The basic criticism of any dual court system is that it creates ‘the menace of demar­ cation disputes between competing courts’.32

21. P Durack, ‘The Special Role of the Federal Court of Australia' (1981) 55 Aust LJ 778, 781; Byers and Toose (1963) 314; Bowen (1979) 809; Commonwealth of Australia, 58 Part Debs (Sen) (12 December 1973) 2725 (Sen L Murphy, 2nd reading, Superior Court of Australia Bill 1973). 22. Durack (1981) 781. 23. Campbell (1979) 16. 24. Byers & Toose (1963) 3 14. 25. Bowen (1979) 813. 26. Burt (1963) 323. See also Campbell (1979) 11. 27. Gibbs (1981) 678; Campbell (1979) 10-11. 28. Campbell (1979) 11. See also Neasey (1983) 340. 29. Byers & Toose (1963) 314; Bowen (1979) 809. 30. For the Commission's work in its Reference on the Service and Execution of Process Act see Australian

Law Reform Commission Issues Paper 5, Service and Execution o f Process. Sydney, 1984. 31. Campbell (1979) 14. 32. Street (1978) 434.

The Allocation of Admiralty Jurisdiction / 173

Whilst they may excite the technical skills of lawyers, disputes as to jurisdiction are of no benefit to the public, to the contrary are highly detrimental.33 In response to this two points are made. First, the ‘jurisdictional problems have been greatly exaggerated’.34 Conflicts of jurisdiction can occur even between State

courts.35 But the reply is made that ‘reassuring statements that the jurisdictional problems of dual courts systems are “greatly exaggerated” provide no positive guidance upon the direction in which, ideally, we should be moving’.36 There seems to be no agreement on the proportion of cases in which jurisdictional diffi­ culties have arisen.37 Nor is there agreement on the significance to be attached to those figures. A small number can be seen as the tip of the iceberg, or as of minor

significance as a percentage of all litigation. Or it can be argued that justice is not a matter to be measured by percentages, that a single notorious case can bring the courts into disrepute. A second response to the basic criticism is to suggest that the jurisdictional problems which have arisen since the establishment of the Family

and Federal Courts should be seen as teething problems which can be, and in sub­ stance have been, resolved by the courts. The ordinary mechanism of appeal is providing guidelines which resolve issues.38 But, while guidelines are emerging, it can be argued that they are insufficiently precise to give effective guidance39, or

that the problem of demarcation is inherent in a dual court system so the effect of appellate guidance is simply to postpone or relocate the difficulty.40 Another way in which courts can minimise the demarcation problem is, it is suggested, by exer­ cising judicial restraint, staying or declining to hear actions in their own courts

which could be heard more completely elsewhere.41 But the scope for judicial ac­ tion in this direction has been doubted.42 • It is conceded that the vesting of concurrent rather than exclusive jurisdiction can resolve many demarcation disputes in a dual court system.43 ‘But to adopt this ex­

pedient on a wide scale is likely to introduce a new set of problems. One is the problem of forum shopping’.44 The assumption that forum shopping is a self- evident evil has not gone unquestioned. The virtues of competition between courts have been stressed by some.45 Against this it might be suggested first, that the idea

of dispensing justice should place courts above or outside the marketplace. For ex­ ample, in defamation cases the media are always defendants, not plaintiffs. The choice of forum is made by the plaintiff and in order to attract business courts would tend according to this theory to compete in offering superior remedies to

plaintiffs. One would expect the competitive model to produce a defamation law

33. Rogers (1981) 631. See also Else-Mitchell (1970) 519: Campbell (1979) 6-8: Gibbs (1981) 677; Noble v Nofe/e (1983) 48 ALR 157, 161 (McPherson J). 34. Durack (1981) 781. See also Bowen ( 1979) 812. 35. Durack (1981) 781 citing Ward v R (1980) 54 ALJR 271 as an example. See also Bowen (1979) 811-12.

36. Street (1982) 515. 37. cf Burt (1982) 509-10. 38. Neasey (1983) 341.

39. Stack v Coast Securities INo 9) Ply Ltd (1983) 49 ALR 193. 222 (Wilson & Dawson J J, dissenting) where the test for pendent jurisdiction is described as imprecise and unsatisfactory". See also the criticism by Rogers (1981) 639, of earlier High Court guidelines. 40. In the United States the problem of demarcation between State and federal courts persists despite much

longer judicial experience of the problem. See on the US experience generally WMC Gummow, "Pendent Jurisdiction in Australia — s 32 of the Federal Court of Australia Act 1976’ (1979) 10 Fed L Rev 211, 215-28. 41. Bowen (1979) 812. 42. Rogers (1981) 646-8. But cf Stack v Coast Securities 'No 9) Ply Ltd (1983) 46 ALR 451.489 (Fitzgerald J). 43. eg Gibbs (1981) 679: Rogers (1981) 648; G de Q Walker. "Competition between Courts: Bane or BountyT

(1981) 55 A us I LJ 312-13: Slack v Coast Securities INo 9) Ply Ltd (1983) 49 ALR 193, 207 (Gibbs CJ). 44. Durack (1981) 782. See also Bowen (1979) 812; Campbell (1979) 18. 45. eg Walker (1981) 313.

174 / Civil Admiralty Jurisdiction

which increasingly favoured plaintiffs at the expense of defendants. Whether this is in accord with notions of justice is open to question. Whether a similar drift would occur in Australian admiralty law under concurrent jurisdiction needs to be con­ sidered, in the light of the fact that Australia is a country of cargo shippers and ship suppliers but has few deep-sea ship owners. A second criticism of the compe­ tition argument is that competition, between courts as elsewhere, tends to favour the strong. The plaintiff who can afford the best advice is more likely to select the court most suitable to its case. The government which has the greater financial re­ sources is better placed to compete for business in terms of making available great­ er curial resources. It is not self-evident that such results are acceptable in the overall community interest. Concurrent jurisdiction also creates a problem of ap­ propriate lines of appeal.46 If appeals are from a State trial court to the Full Feder­ al Court then, ‘if nothing else were done, that would have the consequence of transferring the jurisdictional problem from the first instance to the appellate lev­

el’.47 It may be that a solution to this problem can be found — for example, cross­ vesting of jurisdiction48 — but it is a problem which has to be faced.

• The reality of a dual court system ‘would inevitably and seriously reduce the status of the State Supreme Courts’.49 This is feared where new courts are given exclusive jurisdiction or from the effect of competition where jurisdiction is concurrent. In response it is said that substantial and prestigious matters remain in the jurisdic­

tion of State courts and, in the context of competition, status will only be lost by the courts that fail to perform.50

• State courts are closer to the community and better able to reflect community in­ terest.51 This view has been criticised as question begging; in many areas of law the relevant community is the whole of Australia.52

221. Conclusions From the Debate. The prolonged debate has not resulted in any con­ sensus. No agreed principles have emerged upon which the allocation of jurisdiction should be based. While it is sometimes argued that a single court structure would repre­ sent an ideal solution53, it is also recognised that such a solution will not be achieved at least in the short term, and that practical measures are required.54 This chapter is pre­ mised on the proposition that there will be no immediate general restructuring of the Australian courts55, and that admiralty jurisdiction should be the subject of immediate re­ forms without waiting for any such general restructuring. In this chapter it is necessary to weigh up the particular arguments for conferring jurisdiction in admiralty on particular courts — arguments which, because of their particularity, may have no implications for other areas of jurisdiction or for the major controversy over Federal Court versus Su­ preme Court jurisdiction. In assessing these arguments it is useful to compare the experi­ ence with admiralty jurisdiction in some overseas countries.

46. Durack (1981) 782; Bowen (1979) 816. 47. Durack (1981) 782. 48. ibid; Bowen (1979) 816. 49. F Burt, Comment in Discussion, (1963) 36 Aust LJ 323. See also Campbell (1979) 17. 50. Bowen (1979) 813. 51. Campbell (1979) 17; Neasey (1983) 339-40; Moffitt(1983) 171. 52. Bowen (1979) 813. 53. But for reservations on this solution see eg Campbell (1979) 16; Neasey (1983) 341. 54. See Street (1978) 434; Durack (1981) 782; Rogers (1981) 646; Burt (1982) 510; Moffitt (1983) 167-8. 55. It is also assumed that any cross-vesting legislation which may be enacted will not eliminate the basic dis­

tinctions between courts or their primary jurisdictions.

The Allocation of Admiralty Jurisdiction / 175

Overseas Comparisons

222. England and Wales. In England and Wales, original admiralty jurisdiction is now exercised by the High Court and the County Courts. • The High Court. General jurisdiction in admiralty is exercised by the High Court. For administrative purposes the High Court consists of three Divisions; as part of

the Queen’s Bench Division there is an Admiralty Court and a Commercial Court.56 The judges of the Admiralty Court are nominated from the judges of the High Court by the Lord Chancellor.57 Despite varying court structures over the years, in practice a single ‘admiralty’ judge has been sufficient to deal with almost

all the admiralty business of the High Court, thereby ensuring a generally high de­ gree of expertise. In recent times the judge nominated has invariably practised at the admiralty bar before appointment.58 Since about 1977 admiralty matters have taken up between a half and the whole time of the admiralty judge, with other judges occasionally hearing cases also.59 The Admiralty Court has its own Regis­

trar and an admiralty Marshal. All arrests of a ship or other property are made by the Marshal or, in ports distant from London, by Customs and Excise officers act­ ing under direction. Although notice of all in rem proceedings is given to the Mar­ shal and the central registry in order to preserve the integrity of the caveat against arrest and release system, there is no centralisation of admiralty proceedings either

in personam or in rem; district registries, of which there are well over 100, may be used. Appeals from the Admiralty Court follow the ordinary channels to the Court of Appeal and House of Lords. • County Courts. County Courts have exercised a limited jurisdiction in admiralty

for over a century.60 Certain County Courts nominated by the Lord Chancellor by order (in fact, over 40 courts) have admiralty jurisdiction.61 This jurisdiction covers actions in personam and in rem subject to monetary limits.62 General admiralty claims are limited to 5 000 pounds sterling; claims in the nature of salvage are lim­ ited to cases where the value of the property salved does not exceed 15 000 pounds sterling.63 In the first category it is the value of the claim, not of the res, which is relevant. A very large vessel may therefore be arrested in County Court proceed­ ings as long as the claim against it is small. Parties may confer jurisdiction outside

56. Supreme Court Act 1981 (UK) s 51(1), 6(1). 57. id, s 6(2). 58. FL Wiswall, The Development o f Admiralty Jurisdiction and Practice Since 1800, CUP, Cambridge, 1970, 122-26, 136-37, 140, 144, 153.

59. In the 5 years from 1977-81 about 1 000 admiralty actions were commenced each year, with about 170 warrants of arrest issued annually. Judicial sales of ships during this period totalled 54. About 99% of ac­ tions are settled before trial. Source: Judicial Statistics, England and Wales, prepared annually by the Lord Chancellor’s Department, HMSO, London. 60. County Court Jurisdiction Act 1868 (UK); County Court Admiralty Jurisdiction Amendment Act 1869

(UK). Because s 2(1) of the latter Act conferred broader jurisdiction than that enjoyed by the Admiralty Court at the time, the curious position was created that the inferior court enjoyed greater jurisdiction in some admiralty matters than the superior court. The position was remedied by altering the High Court’s jurisdiction in the Administration of Justice Act 1920 (UK). Such is the present state of admiralty juris­

diction in Australia that it was necessary to explore this historical curiosity in order to decide a modern Australian case: The Ship 'Terukawa Maru' v Co-Operated Dried Fruit Sales Pty Ltd (1976) 126 CLR 170, 173-4. See Wiswall (1970) 98 for the miscellany of local courts (such as the Liverpool Court of Passage) which exercised admiralty jurisdiction in the 19th century. 61. County Courts Act 1984 (UK), s 26(1); Civil Courts Order 1983 (UK), SI 1983 No 713 as amended. 62. Non-monetary restrictions on the ability to arrest were removed by the Supreme Court Act 1981 (UK)

Sch 7. Previously s 83 of the County Courts Act 1959 (UK) allowed pre-judgment arrest only where it could be shown ‘that it is probable that the vessel, aircraft or property to which the proceedings relate will be removed out of the jurisdiction of the court before the plaintiffs claim is satisfied’. 63. County Courts Act 1984 (UK) s 27(2).

176 / Civil Admiralty Jurisdiction

these limits by a signed memorandum of agreement.64 The types of subject matter within a County Court’s admiralty jurisdiction are more limited than in the High Court. Claims or disputes concerning ownership, possession or mortgages of ves­

sels or disputes between co-owners (proprietary maritime claims) are excluded. Nor can a County Court deal with bottomry claims, claims for droits of admiralty, claims for the forfeiture or condemnation of a ship or cargo or claims for the res­ toration of a ship or cargo after seizure. Not a great deal of use is made of the ad­ miralty jurisdiction of the County Court. The number of actions commenced fluc­ tuates between about 4.5% and 8.5% of the number of High Court actions. War­ rants of arrest are infrequent, and court sales very rare. The arrests normally in­ volve pleasure craft and may be carried out independently of the supervision of the High Court. Alternatively the admiralty Marshal may be ordered to effect an arrest by the County Court.65 Comparing the types of matters brought in both courts, the number of collision claims roughly reflects the general distribution of business between them; cargo claims are almost never brought in the County Court; but between a quarter and two-fifths of all goods supplied/repairs claims are made in the County Court. Provision is made for the transfer of cases in both directions between High Court and County Court.66 There are also provisions al­ lowing only limited costs to be recovered in the High Court if the action could conveniently have been brought in the County Court.67 The County Court Rules contain provisions dealing with many of the special features of admiralty proceed­ ings such as preliminary acts68, the use of assessors69 and the appraisal and sale of vessels.70 Appeals from decisions of County Courts in admiralty matters are not treated differently from other appeals, though special provision is made for the use of assessors by the Court of Appeal and for dealing with the res pending resolution of the appeal.71

223. New Zealand. The High Court has general jurisdiction in admiralty.72 7 3 District Courts (until 1980 called Magistrates Courts) have jurisdiction over the full range of ad­ miralty subject matter, but can only exercise jurisdiction in personam, not in rem.7i The size of the claim must be within the monetary limits of the jurisdiction of the District Court unless the parties have agreed otherwise in writing.74 The ordinary procedures of the District Courts apply to appeals on admiralty matters.75 The District Court Rules, while providing that all actions are to commence as ordinary actions, make provision for some of the special features of admiralty procedure such as preliminary acts.76 There is comprehensive provision for the transfer of cases in both directions between High Court and District Courts.

224. United States. The constitutional position in the United States was briefly des­ cribed in para 69. Federal District Courts have exclusive jurisdiction over admiralty and maritime proceedings in rem but have concurrent jurisdiction with State courts in per-64. id, s 27(b). 65. Information supplied by Justice B Sheen, the Admiralty Court Judge, 21 Sept 1983. 66. County Courts Act 1984 (UK) s 40-2. 67. id, s 29. 68. County Court Rules 1981 (UK) O 40 r 9(3). 69. id, 0 13 r 11.

70. id, 0 40 r 14-15. 71. County Courts Act 1984 (UK) s 77, 78, 28(12). 72. Admiralty Act 1973 (NZ) s 3(l)(a); Judicature Amendment Act 1979 (NZ) s 12. 73. Admiralty Act 1973 (NZ) s 3( 1 )(b); District Courts Amendment Act 1979 (NZ) s 2. 74. District Courts Amendment Act 1975 (NZ) s 2; District Courts Act 1947 (NZ) s 37. The arrest limit is

$12 000: District Courts Amendment Act 1979 (NZ) s 9(1 )(a). 75. Admiralty Act 1973 (NZ) s 13(1). 76. District Court Rules 1948 (NZ) r 6, 11, 17.

The Allocation of Admiralty Jurisdiction / 177

sonam.11 In practice the number of admiralty cases brought in State courts is minimal.7 7 78 Until a merger was effected in 1966, the admiralty jurisdiction of District Courts was car­ ried on under a set of procedural rules distinct from those governing its other business. Thus it was common to speak of Federal Courts on their 'civil side’ and their ‘admiralty side’.79 But there was never any emergence of a system of streaming cases within the Fed­ eral Courts so as to allow the development of specialist admiralty judges.80 The merger of the admiralty rules with the ordinary Federal Rules of Civil Procedure in 1966 sharply re­ duced the esoteric features of admiralty procedure and thus made conducting admiralty

litigation more feasible for the general legal practitioner. But it has been argued that this process did not go far enough and that traps for the unwary still exist.81 Difficulties have been experienced in the area of ancillary and pendent jurisdiction.82 Before the 1966 uni­ fication, admiralty procedure allowed broad joinder of related claims and parties as long

as the claims were all maritime. However if the joined claim was not maritime, the courts were firm in denying jurisdiction.83 The reasons for this were twofold: to allow broad joinder would infringe the constitutional limitations on the grant of admiralty jurisdic­ tion, and could deprive third parties of their right to jury trial, as there is no such right in

admiralty actions.84 While the latter issue is not relevant to the Australian situation, the former may well be. Since the 1966 unification of rules the primary issue has been the ex­ tent to which the former admiralty position has been replaced by the more liberal joinder rules applying to the ‘ordinary’ jurisdiction of District Courts. A further issue is the un­

certainty in the scope of these rules. It is difficult to estimate how much real concern these issues, particularly the former, cause in practice. There is a considerable volume of litera­ ture on the topic revealing a divergence of views but there are relatively few cases.85 It does not seem that the conferring of exclusive in rem and concurrent in personam admir­

alty jurisdiction on Federal District Courts has led to any considerable number of bor­ derline jurisdictional disputes between the entirely separate federal and State court sys­ tems.

225. Canada. Admiralty jurisdiction is exercised by the Trial Division of the Federal Court of Canada exclusively in rem and concurrently in personam with Provincial Su­ preme Courts, except in Newfoundland.86 In British Columbia, Provincial County Courts also have admiralty jurisdiction limited both by subject matter and size of claim.87 In

practice almost all admiralty actions are brought in the Federal Court. The specialist ad-77. 28 USC 1333(1). 78. See eg the statistics cited by Brennan J in Romero v International Terminal Operating Co 358 US 354, 409 (1959) (about 150 cases in State courts in the years 1953-57).

79. See DW Robertson, ‘Admiralty Procedure and Jurisdiction after the 1966 Unification" (1976) 74 Mich L Rev 1627, 1631. 80. cf Wiswall (1970) 134. 81. Robertson (1976) 1631. One area of difficulty involves jury trial: see BB Woodhouse, ‘Powell v Offshore

Navigation Inc : Jurisdiction over Maritime Claims and the Right to Trial by Jury' (1982) 82 Col L Rev 784. 82. The distinction between the meaning of the terms 'ancillary' and ‘pendent’ is becoming blurred: see Robertson (1976) 1646. See also JM Landers, ‘Sleight of Rule: Admiralty Unification and Ancillary and

Pendent Jurisdiction" (1972) 51 Texas L Rev 50, 57. 83. BR Bentley, ‘Third-Party Practice in Admiralty: Ancillary Jurisdiction' (1974) 28 Southwestern LJ 1021, 1027-8; Landers (1972) 58-60. 84. Landers (1972) 59-60.

85. The articles by Landers, Bentley and Robinson cite only a handful of cases as examples. See also JH Lederer, ‘Pendent Jurisdiction in Admiralty' [1973] Wis L Rev 594. 86. Federal Court Act 1970 (Can) s 22( 1). The admiralty jurisdiction of the Newfoundland Supreme Court was surrendered to the Federal Courts under the Terms of Union by which the Province joined Canada

in 1949: see Cull v Rose (1982) 139 DLR(3d) 599. 87. Balfour Guthrie (Canada) Ltd v Far Eastern Steamship Co (1977) 82 DLR (3d) 414. cf Heath v Kane (1975) 10 OR(2d) 716 in which the Ontario Court of Appeal held that Ontario County Courts lacked any admir­ alty jurisdiction.

178 / Civil Admiralty Jurisdiction

miralty bar in Canada is very small, and strongly favours Federal Court jurisdiction, be­ cause all Canadian counsel can appear in the Federal Court wherever located. The Fed­ eral Court may sit anywhere in Canada, not just in places where there are registries. Fed­ eral Court trial is much more prompt than trial in the Provincial Supreme Courts.88 The ‘remedies available in the Federal Court are more effective in certain respects’.89 Rules as to service ex juris are more liberal than in some of the provinces, and the process of ex­ ecution is simplified if it proves necessary to go outside the jurisdiction to seek assets.90 Only in British Columbia are admiralty actions brought to any extent in the Supreme Court. Only in that Province is there any great pressure for provincial courts to have con­ current jurisdiction with the Federal Court (including jurisdiction in rem).9' Otherwise the weight of opinion in the legal profession appears to be against conferring in rem jurisdic­ tion on the provincial courts.92 There is no suggestion, even in British Columbia, that the Federal Court should be divested of any of its existing admiralty jurisdiction in favour of provincial courts.93

• The Federal Court of Canada. There is no separate admiralty division within the Trial Division of the Federal Court. Admiralty rules have been integrated with the ordinary Federal Court Rules. Those elements which are unique to admiralty have been grouped in a separate Division within the Rules, but in most respects the gen­ eral rules apply. There is a separate section within the Court’s registry which spe­ cialises in admiralty matters. The registry is organised and treated as a single unit. There are local offices in the capital city of each Province (except British Colum­ bia) and Territory and in five other cities.94 Material filed in any office is deemed to be filed in the central office.95 The system is computerised so it is a simple matter to discover what claims are outstanding against a particular ship and what arrest war­ rants are outstanding, and so to operate the caveat system. Only a Federal Court

Marshal may arrest a ship, but provision is made for local provincial sheriffs and deputy sheriffs to act, ex officio, as marshals if no federal appointment has been made for the locality.96

• The Judiciary. There is no formal provision in the Federal Court for specialist judges in admiralty and the first Chief Justice of the Court was opposed to allow­ ing de facto specialisation, a view which has been criticised.97 In practice a degree of de facto specialisation has occurred with the bulk of the admiralty business

88. Information supplied to the Commission by Mr PM Troop QC, Dept of Justice, Ottawa, September 1983. But time limits within which claims may be brought are in some respects longer in provincial courts: see eg The Ship CF Todd" v The Ship Tartu Warrior’ (1982) 133 DLR(3d) 70. 89. Canadian Bar Association, Federal Court Report, Ottawa, 1983, 29. 90. ibid. 91. id, 29. 92. id, 30. 93. id, 31. See also M MacGuigan (Minister of Justice and AG of Canada), Proposals to Amend the Federal

Court Act, Dept of Justice, Ottawa, 1983, 3, 15-16. 94. RT Hughes, Federal Court o f Canada Service, Butterworths, Toronto, 1983, 805. 95. WR Jackett, ‘The Federal Court of Appeal’ (1973) 11 Osgoode Hall LJ 253, 271-3 describes the registry system. 96. Federal Court Act 1970 (Can) s 13. See also International Marine Banking Co Ltd v M /T Dora [1977] 1

FC 282.

97. JL Jessiman, On the Heritage o f the Admiralty Court in British Columbia, Fac of Law, UBC, mimeo, 1983, 38.

The Allocation o f Admiralty Jurisdiction / 179

being dealt with by three or four of the eleven Federal Court judges.98 The Canadian Bar Association has not recommended any changes in this regard.99 • Appeals. Appeals from the Federal Court Trial Division on all matters including admiralty go to the Federal Court of Appeal and from there to the Supreme Court

of Canada.100 Appeals from provincial courts on admiralty matters follow the ordi­ nary channels. • Current Problems. A major area of dissatisfaction with the current allocation of jur­ isdiction between courts concerns the questions of ancillary and pendent jurisdic­

tion, a problem which in Canada is not unique to admiralty matters. The Canadian Bar Association’s Report gave as examples the impossibility of joining in admir­ alty cargo claims, the on-shore carrier, the warehouse operator, and other carriers such as lighter-operators, and the problem of obtaining complete relief in actions involving ship repairers.101 But neither the Bar Association (reflecting the weight of submissions received from its members) nor the Canadian Maritime Law Associa­ tion regarded the giving of in rem jurisdiction to provincial courts as a solution to this problem.102 In addition there has been a large volume of litigation testing the

scope of federal constitutional power to confer particular items of subject matter jurisdiction on the Federal Courts.103 The more recent decisions show a trend in fa­ vour of upholding jurisdiction104, but the issues involved are peculiar to the Canadian Constitution and are not relevant to this Report. However it is said (at

least in British Columbia) that there is a growing trend of avoiding admiralty juris­ diction altogether due to the alleged lack of expertise of Federal Court judges, the problem of pendent and ancillary jurisdiction and the constitutional uncertain­ ties.105 Unless remedies unique to admiralty are required it is thought better to frame a complaint (even one involving a salvage claim) as a common law action in

a Provincial Supreme Court.106

Constitutional Powers to Allocate Jurisdiction

226. Broad Commonwealth Power. The scope of Commonwealth constitutional power over matters of ‘admiralty and maritime jurisdiction’ was examined in chapter 5. The

98. The volume of business is small. In 1976, 825 admiralty actions were filed but only 22 came to trial: Canadian Bar Association, 28. Spread among even three judges, this volume of work would not necessar­ ily lead to a rapid growth of expertise. 99. Their Federal Court Report, 30-1, comments that 'the interests of claimants and of the legal profession are

well served by the Federal Court of Canada'. 100. Federal Court Act 1970 (Can) s 27(1), 31. 101. Canadian Bar Association, 29-30. 102. id, 30. The Report makes no positive recommendation on the issue, suggesting that perhaps the pro­

fession is content to live with the problem. For examples of cases involving ancillary jurisdiction see Que­ bec & Ontario Transportation Co Ltd v The Ship Incan St Laurent' (1980) 121 DLR (3d) 510 affirming (1979) 104 DLR (3d) 139; Transports Insurance Co Inc v Ship Ondine'( 1982) 138 DLR (3d) 745. 103. See JB Laskin & RJ Sharpe, 'Constricting Federal Court Jurisdiction: A Comment on Fuller Construction'

(1980) 30 U o f Toronto LJ 283, 304, for a list of the cases. 104. eg Zavarovalna Skupnost Triglav v Terrasses Jewellers Inc [1983] 1 SCR 283 (insurance a provincial mat­ ter, navigation and shipping a federal matter; held, Federal Court validly given jurisdiction over marine insurance). 105. Jessiman (1983) 42. No evidence is given to support the assertion.

106. ibid. Apparently attempts to do this for salvage claims have been only partially successful. Jessiman notes that the advent of Mareva injunctions has reduced the need to have recourse to admiralty, particularly because in Canada sister ship arrest is not available in admiralty. See eg Irving Oil Ltd v Biornstad, Biorn & Co (1981) 35 NBR (2d) 265; W Tetley, 'Canadian Maritime Law Judgments in 1982' [1983] LMCLQ 603, 609. On the co-existence of Mareva injunctions with arrest in rem see Pamar Fisheries Ltd V Parceria

Maritime Esperanca LDA (1982) 53 NSR (2d) 338.

180 / Civil Admiralty Jurisdiction

Commonwealth has general power to allocate federal jurisdiction over matters of ‘admir­ alty and maritime jurisdiction’ to appropriate Australian courts, and to regulate appeals, transfer and remittal between courts and other related matters. In particular, it may vest jurisdiction in existing State courts107, in existing or specially created federal courts108, or

in Territory courts.109 Certain limitations apply depending on which choice is made. The Commonwealth cannot alter the ‘structure’ or ‘constitution’ of a State court vested with federal jurisdiction110, although it has extensive power over the scope of jurisdiction (which need not be limited either in terms of subject matter or geographical extent to the jurisdiction otherwise exercisable by the court). In the case of federal courts the Com­

monwealth is, subject to Chapter III of the Constitution, fully competent to regulate the structure of the court. In the case of Territory courts the restrictions imposed by Chapter III do not apply111, but it appears that a Territory court can only be given jurisdiction by a law under s 122 of the Constitution: it cannot be given federal jurisdiction.112 1 1 3 (However a federal court can be given jurisdiction by a law under s 122.1U) This is the most signifi­ cant restriction on Commonwealth power for present purposes. It is difficult to envisage a federal admiralty law which would illicitly alter the ‘structure’ of a State court.114 The re­ strictions on the creation of federal courts imposed by Chapter III relate for the most part to guarantees of judicial independence and tenure, and are readily complied with. Thus the Commonwealth could invest exclusive jurisdiction under Constitution s 76(iii) in State courts, or in the federal Court (or an Australian Admiralty Court specially created), or could invest jurisdiction in federal, State and Territory courts concurrently (with provision for transfer or remittal of cases between them). It could make the juris­ diction of each State Supreme Court (but not, however, any Territory court) an Australia­ wide jurisdiction. It could provide for appeals from all such courts in admiralty matters to go to the Federal Court exclusively, or to the State Full Courts or Courts of Appeal (in the case of appeals from State courts at first instance).115 It could provide for an appeal to the High Court as of right or by special leave only, and in some or all cases.116

227. Pendent or Ancillary Jurisdiction. Potentially the most significant constitutional dif­ ficulty is the problem of ‘accrued’, ‘pendent’ or ‘ancillary’ jurisdiction in cases with non- federal elements. It is possible for the same case to raise issues of ‘admiralty and mari­ time jurisdiction’ and other issues of a non-federal kind.117 Where jurisdiction is vested in a State Supreme Court this presents no particular problems, since the non-federal aspects will usually be able to be dealt with at the same time. The problem occurs with federal courts, the jurisdiction of which must be derived from Chapter III of the Constitution and which are not, in the same way as Supreme Courts, courts of general jurisdiction.

However, it is established that a federal court has jurisdiction to determine the entire case before it when it constitutes a single ‘matter’, and the High Court has adopted a very

107. Constitution, s 77(iii). 108. id, s 76 (High Court), 77(i) (other federal courts). 109. id, s 122. 110. Le Mesurier v Connor( 1929) 42 CLR 481: Russell v Russell (1976) 9 ALR 103; Z Cowen & L Zines, Feder­

al Jurisdiction in Australia. 2nd edn, OUP, Melbourne, 1978, 196-9. 111. Λ r Bernasconi (1915) 19 CLR 629; Porter v R (1926) 37 CLR 432; Spratt v Hermes (1965) 114 CLR 226. 112. Capital TV & Appliances Pty Ltd v Falconer 11971) 125 CLR 591. See J Crawford, Australian Courts o f Law, OUP, Melbourne, 1982, 38-42. 113. Spratt v Hermes ( 1965) 114 CLR 226. 114. The provision of Admiralty assessors, provided at least that their role was an advisory one, would not do

so. In fact the Commission makes no recommendation for admiralty assessors, for other reasons. See para 288-91. The question whether the Admiralty Registrar can be given ancillary judicial powers is dis­ cussed in para 287. 115. Constitution, s 77. 116. id, s 73. 117. See generally Cowen & Zines (1978) 72-5; Crawford (1982) 132-7.

The Allocation o f Admiralty Jurisdiction / 181

broad definition of when this is so.118 Stated briefly, a federal court has jurisdiction over the non-federal aspects of a controversy if a federal claim over which it does have juris­ diction is an integral, and not insubstantial, part of that claim. In the words of Justice Mason, the non-federal and the federal claim may be related because they ‘so depend on

common transactions and facts that they arise out of a common substratum of facts’.119 1 2 0 1 2 1 That test was approved by the majority in Fencott v Muller, where the Court said: What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their

conduct and relationships. The scope of a controversy which constitutes a matter is not ascer­ tained merely by reference to the proceedings which a party may institute, but may be illumi­ nated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of

impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter 120

This broad and flexible test has been applied in many subsequent cases, including cases both of ‘pendent subject matter’ and ‘pendent party’ jurisdiction. The question of pen­ dent party jurisdiction is of particular significance in admiralty, due to the frequency with which third parties are joined in cargo and damage cases. Fencott v Muller'1' itself in­

volved pendent party jurisdiction, and the same broad and flexible test was applied to that aspect of the case, and has been followed since.122 228. Associated Claims. A federal court exercising admiralty jurisdiction could also be given jurisdiction over any ‘associated’ claim (even if a ‘disparate’ one) which was itself a matter of federal jurisdiction, for example because it arose under a law made by the

Parliament.123 Gaps or uncertainties in the federal admiralty and maritime jurisdiction could, if necessary, be filled in this way through an exercise of substantive Common­ wealth legislative powers. So far as the Federal Court of Australia is concerned, this has

already been done. Section 32 of the Federal Court of Australia Act 1976 (Cth) provides that: (1) To the extent that the Constitution permits, jurisdiction is conferred on the Court in re­ spect of matters not otherwise within its jurisdiction that are associated with matters in

which the jurisdiction of the Court is invoked. (2) The jurisdiction conferred by sub-section(l) extends to jurisdiction to hear and determine an appeal from a judgment of a court so far as it relates to a matter that is associated with

a matter in respect of which an appeal from that judgment, or another judgment of that court, is brought.

The effect of s 32(1) is to confer ‘associated’ federal jurisdiction on the Court to the extent that the Constitution permits. As the High Court held in United States Surgical Corpora­ tion v Hospital Products International Pty Ltd 124, this means that the Court has jurisdic­ tion over any matter of federal jurisdiction (that is, those matters listed in s 75 and 76 of the Constitution) to the extent that the matter is ‘associated’ with a matter properly before the Court. In the present context, the effect would be to confer on the Court what may be

described as ‘contingent’ federal jurisdiction over matters (including matters of ‘Admir­ alty and maritime jurisdiction’) within s 75 and s 76, the contingency being that those

118. Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 33 ALR 465; Fencott v Muller (1983) 46 ALR 41; Stack v Coast Securities (No 9) Pty Ltd (1983) 49 ALR 193. 119. Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 33 ALR 465, 504. 120. Fencott v Muller (1983) 46 ALR 41, 67, 68, 69 (Mason, Murphy, Brennan & Deane JJ). This test was ap­

proved and followed in Stack v Coast Securities (No 9) Pty Ltd (1983) 49 ALR 193. 121. (1983) 46 ALR 41. 122. See eg Stohl Aviation v Electrum Finance Pty Ltd (1984) 56 ALR 716; Hilton v Wells (1985) 59 ALR 281. 123. cf United States Surgical Corporation v Hospital Products International Pty Ltd (1981) 33 ALR 465.

124. (1981) 33 ALR 465.

182 / Civil Admiralty Jurisdiction

matters are ‘associated’ with a proceeding before the Court. The High Court has not yet decided how the term ‘associated’ is to be construed125, but since s 32 only has effect after the already broad and flexible test for a ‘matter’ within the Court’s jurisdiction has been applied, it is likely that a broad interpretation will be adopted. In any event the ‘associa­ tion’ in s 32(1) is a statutory, not a constitutional one. Jurisdiction could, for example, be conferred over any matter of federal jurisdiction arising between the original parties or between those parties and any other parties properly joined. It was recommended in para

195 that associated jurisdiction over all matters of admiralty and maritime jurisdiction be conferred on all courts exercising jurisdiction under the proposed legislation.

The Allocation of Jurisdiction

229. Eliminating Certain Options. Constitutionally a large number of schemes could be devised for allocating admiralty jurisdiction in Australia. But when the opinions ex­ pressed to the Commission, the arguments contained in the Zelling Report, the nature of the more general debate about the structure of the Australian court system, the volume and geographical distribution of admiralty matters at present and the needs of litigants are considered, two plans of allocation are the prime candidates for consideration. These are either vesting State and Territory Supreme Courts with federal admiralty jurisdiction or vesting such jurisdiction concurrently in the Federal Court of Australia and in State and Territory Supreme Courts. Whichever option is selected, additional choices have to be made both as to the geographical scope of jurisdiction, the avenues of appeal and the possibility of conferring in rem jurisdiction on lower courts. Before giving detailed con­ sideration to the two options and these supplementary matters, something should briefly be said about why other options have been excluded.

230. A Separate Australian Admiralty Court? In the late 1960s Justice Zelling advocated a separate federal court devoted to admiralty and maritime matters.126 Such a court would have the potential to provide a high level of expertise, thereby enhancing Aus­ tralia’s reputation as a forum in which to litigate admiralty matters. It would also have the potential to encourage uniform and consistent development of the law. From com­ ments made at the time it was clear that the proposal did not command widespread sup­ port.127 This continues to be the position.128 There are certainly arguments in favour of centralisation as a method of achieving uniformity. The opinions of overseas admiralty lawyers and judges expressed to the Commission have been strongly in favour of all pos­ sible measures being taken to secure uniformity in the jurisdiction and procedure of the Admiralty Court and in its application of the law. But the argument for uniformity has to be balanced against other factors, including the administrative difficulties of providing Australia-wide access to the jurisdiction in urgent cases and the need to avoid demarca­ tion disputes between courts. Moreoever it is not necessarily the case that uniformity re- • quires jurisdiction to be invested in a single court. In the United Kingdom (which is not a

federation), admiralty jurisdiction is exercised in England and Wales by the High Court on the basis of the Supreme Court Act 1981, but in Scotland by Scottish courts based on the Administration of Justice Act 1956 (UK).129 In England and Wales, admiralty juris-125. In the Hospital Products case five justices declined to determine whether a copyright claim was ‘associ­

ated’ with a trade practices claim on the facts. Barwick CJ and Murphy J held that it was. 126. A brief summary of Justice Zelling’s proposals can be found in ‘Admiralty Jurisdiction in Australia' (1969) 4 Law Council Newsletter 11. 127. Law Council of Australia and Maritime Law Association of Australia and New Zealand (Chairm an: Jus­

tice HE Zelling), Joint Committee, Report, Admiralty Jurisdiction in Australia. 1982, para 11.5. 128. id, para 13-1. 129. cf The Eschersheim [1976] 1 All ER 920, 924-5 (Lord Diplock).

The Allocation o f Admiralty Jurisdiction / 183

diction both in rem and in personam can be exercised within the limits of their ordinary jurisdiction by County Courts, on the basis of separate provisions.130 These variations from ‘uniformity’ do not appear to give rise to insuperable difficulties in practice. The ar­ gument for uniformity also assumes that, if admiralty jurisdiction is conferred upon a

number of courts (say, the Federal Court and Supreme Courts), differences in the inter­ pretation of admiralty law and practice will occur and persist. While there is some evi­ dence for this131, on the whole Australian courts do have regard to decisions of courts in other Australian jurisdictions.132 Moreover the volume of admiralty business is simply too small and too geographically dispersed to make a court devoted solely to admiralty mat­ ters a practical proposition. In England, where the volume of business is much greater,

the admiralty business now occupies one Admiralty judge on a more-or-less full time basis, but it has not always done so.133 For these reasons what might be thought the ideal solution of a specialist admiralty court is not realistically capable of being achieved in Australia.

231. Exclusive Federal Court Jurisdiction?There, are several disadvantages in vesting ad­ miralty jurisdiction exclusively in the Federal Court. One is the limited Federal Court presence in the smaller State capitals and its absence from the regional centres. The stat­ istics outlined in para 219 indicate that a considerable volume of admiralty business arises outside Sydney and Melbourne. The Western Australian Branch of the Maritime

Law Association commented that with only a single Federal Court judge based in Perth there might be problems of access for what are often urgent applications due to the limit­ ed time a vessel is expected to be in port or the cost of delaying the departure of a ves­ sel.134 Under s 32A of the Federal Court of Australia Act 1976 (Cth) a State Supreme Court is invested with federal jurisdiction to hear and determine any application that may be made to a Federal Court judge sitting in Chambers. But it hardly seems satisfac­ tory to confer exclusive admiralty jurisdiction on the Federal Court and then rely on s 32A to cope with what might be expected to be a significant number of Chambers appli­ cations in a jurisdiction in which urgent applications are common. In addition, as the Queensland Branch of the Association pointed out, the Federal Court does not have any

registry outside Brisbane, whereas the Supreme Court has registries in Townsville and Rockhampton which handle a considerable amount of admiralty business.135 The same point could be made in relation to Tasmania where the Federal Court has a registry only in Hobart. Admiralty matters arise at least as frequently in regional centres as in Ho­

bart.136 Though the Federal Court is continuing to grow there is no prospect that in the foreseeable future it will have a geographically dispersed presence to match that of some State Supreme Courts. In some cases exclusive Federal Court admiralty jurisdiction would result in difficulty of access, delay and greater witness travel time than is experi­ enced at present. A second argument involves the problem of pendent jurisdiction. Giv­

ing exclusive jurisdiction to the Federal Court would raise problems of demarcation dis­ putes between courts. As was noted in para 220 there is a wide range of opinion as to the

130. County Courts Act 1984 (UK), s 28. See para 222. 131. eg see The Ship Texaco Southampton' v Burley [1982] 2 NSWLR 336, 339 where Glass JA declined to be bound by Fisher v The Ship Oceanic Grandeur' (1972) 127 CLR 312, a decision of a single judge exercis­ ing the admiralty jurisdiction of the High Court, despite the fact that ‘it was an express ruling of law on

the point in issue before us'. The High Court decision was not given ‘in the framework of the appellate hi­ erarchy to which this Court belongs ...’ 132. See eg Delrosa v Clippers Anchorage Pty Ltd, unreported, 6 November 1978, NSW Supreme Court (Sheppard J) in which a definite effort is made to discover an Australian standard against which to meas­

ure the appropriateness of a salvage award in a particular case. 133. See para 222. 134. Submission 6 (5 October 1983), in (1983) 1(3) M LA A N Z Journal 23, 26. However there are now two Fed­ eral Court judges based in Perth. 135. id, 25. See also para 219, n 6, 11. 136. See para 219, n 7.

184 / Civil Admiralty Jurisdiction

number and significance of such disputes arising out of matters presently within the Fed­ eral Court’s exclusive jurisdiction. Unless there are compelling advantages to be gained it would be unwise to add admiralty to these matters. Other, though perhaps less substan­ tial, arguments have also been made. At present most Australian judicial expertise in ad­ miralty is to be found in State and Territory Supreme Courts. Making Federal Court jur­ isdiction exclusive would, unless special arrangements were made, result in the loss of this expertise.137 It has also been argued that depriving State and Territory courts of a jur­ isdiction which they have long possessed could be seen as a downgrading of those Courts and the breaking of historic ties.138 While there are advantages to exclusive Federal Court jurisdiction they are not so significant as to outweigh these disadvantages. There is much to be said for vesting admiralty jurisdiction in a court whose ordinary jurisdiction is nationwide, in order to cater for the problem of ships moving from port to port around Australia. But it does not follow that the admiralty jurisdiction must be exclusive to such a court to obtain those benefits. In addition it is not clear that there is a federal interest in admiralty matters arising out of local events such as the collision of two local fishing or pleasure craft on Sydney Harbour, sufficient to justify vesting exclusive jurisdiction in the Federal Court.139 Having all admiralty writs originate in a single court would be of some value in enabling potential litigants to discover whether arrest warrants were outstanding in Australia against, or had been served on, a particular ship, and to deal with other sit­ uations in which there are a multiplicity of claims against a single ship. Similarly, a single national register of caveats against arrest would clearly be of value. But while the Federal Court would be in the best position to create such a register, its ability to do so is not de­ pendent upon a conferral of exclusive jurisdiction.140 Although there are some arguments in favour of exclusive Federal Court jurisdiction the balance of considerations is clearly against exclusivity.

232. High Court Jurisdiction? During the decade from 1974 to 1983 just over a quarter of all admiralty matters commenced in Australia were commenced in the High Court. The Zelling Report recommended that the High Court retain its original jurisdiction in admiralty141, on the ground that there was a need to have original jurisdiction in a court whose jurisdiction was Australia-wide in order to cater for the problem of serving process on a ship that moved from State to State. It is clear that this need can be met equally well by giving admiralty jurisdiction to the Federal Court.142 There has been an increasing trend in recent years to emphasise the High Court’s role as a constitutional and final ap­ pellate court. The removal of as much of the Court’s original jurisdiction as possible is a corollary.143 It would be inappropriate to make an exception for admiralty matters when the only reason for seeking original High Court jurisdiction in such matters can be met

137. MLAANZ Submission (1983) 28. cf para 225 on the loss of judicial expertise in admiralty following the establishment of the Federal Court of Canada in 1970. The need to avoid loss of expertise was noted in a number of submissions: HG Fryberg, Submission 4 (19 May 1983) 4; Hon T Sheahan MLA, New South Wales Attorney General, Submission 48 (23 May 1985). 138. Zelling Report, para 13.3. 139. MLAANZ Submission (1983) 28. Compare the different views taken by the majority and minority of the

US Supreme Court on the degree of federal interest in asserting admiralty jurisdiction over a local collis­ ion between locally-owned pleasure craft in Foremost Insurance Co v Richardson 457 US 668 (1982). By a 5:4 majority the Court upheld the exercise of federal admiralty jurisdiction. 140. On caveats against arrest para 300; on caveat registers see para 293. 141. Zelling Report, para 13.3(e). 142. As is acknowledged in the MLAANZ Submission (1983) 29. 143. Barwick (1977) 488; Gibbs (1981) 677; Durack (1981) 779.

The Allocation o f Admiralty Jurisdiction / 185

equally well by the Federal Court. The proposed legislation should accordingly not give any original jurisdiction to the High Court.144

Allocating In Personam Admiralty Jurisdiction

233. Proposed Allocation. Although the ability to proceed in rem is the unique character­ istic of admiralty jurisdiction it is universally accepted that, where the subject matter per­ mits, a plaintiff should be permitted also to proceed in personam in admiralty.145 Admir­ alty jurisdiction in personam (apart from that over limitation actions) should be conferred

on all courts in Australia within the ordinary limits of their civil jurisdiction, such as lim­ its as to venue, size of claim, availability of equitable and other remedies. In those juris­ dictions which have a three-tier structure (for example a District Court and Courts of Pet­ ty Sessions) both intermediate and lower levels would be included. Cases brought in a

higher court which could have appropriately been brought in a lower court would be sub­ ject to existing provisions as to transfer and costs. Jurisdiction would not be given to spe­ cial purpose courts and tribunals such as the New South Wales Land and Environment

Court. Some difficulties arise in relation to the Federal Court of Australia. It is best des­ cribed as a specialist court although it has a considerable range of matters within its juris­ diction. If it is not to be given in rem jurisdiction there would appear to be no reason to confer on it in personam jurisdiction in admiralty. The question of the Federal Court being given in rem jurisdiction is considered later in this chapter, and it is concluded that

in rem jurisdiction should be conferred on the Federal Court. If this is accepted it is clearly essential that the Federal Court also have correlative in personam jurisdiction. However, there is no minimum limit on the size of claims which may be brought in the Federal Court nor are there any venue restrictions. This problem exists already with the

Federal Court’s jurisdiction under the Trade Practices Act 1974 (Cth), where there is no lower limit on the size of claims. It is sufficient to rely on the Federal Court’s discretion as to costs, and on the remittal and transfer provisions discussed in para 238 and 241 which would also allow the Federal Court to transfer or remit proceedings to inferior courts possessing admiralty jurisdiction.

234. Reasons for Allocation. Having set out the recommended scheme it remains to jus­ tify it. Basically the reasoning is negative: there seems no sufficient reason not to confer in personam jurisdiction in this way. There are good arguments for restricting to superior courts in rem admiralty jurisdiction. Arrest of a ship is clearly a fairly drastic step. Appli­

cations for arrest will frequently have to be treated as a matter of urgency. None of these characteristics apply to admiralty actions in personam. Jurisdiction in such actions has to be obtained by service of process on the defendant. Only courts whose ordinary rules al­ low such service to be made outside Australia will be able to entertain admiralty actions

against overseas defendants. There is a large degree of overlap between those matters which can be brought in admiralty and in ordinary civil courts. While there are some spe-

144. The Chief Justice of the High Court was consulted on the question of the withdrawal of its present juris­ diction. He stated that: the repeal of the Colonial Courts of Admiralty Act 1890 (Imp) and the conferral of concurrent juris­ diction in admiralty and maritime matters upon the Supreme Courts of the States and Territories

and the Federal Court of Australia, with the consequence that the High Court will no longer exercise original jurisdiction in admiralty, would be an appropriate and desirable reform. Sir Harry Gibbs CJ, Submission 47(16 May 1985). 145. See para 142.

186 / Civil Admiralty Jurisdiction

cial rules of law which are exclusively within the province of admiralty courts146, most admiralty disputes can be framed as actions in contract or tort or for possession. As such they can be brought outside admiralty in a court with ordinary civil jurisdiction. The ar­ gument is double-edged. If the matters can be framed as non-admiralty civil actions, what need is there to confer in personam admiralty jurisdiction on all courts exercising general civil jurisdiction? The answer is partly that the overlap between present ordinary civil jurisdiction and in personam admiralty jurisdiction is not complete. Partly it is a means of demystifying admiralty. If there is nothing esoteric about admiralty actions in personam, it is useful to acknowledge the fact by allowing jurisdiction over such actions

to be allocated according to the general rules by which civil matters are allocated to courts.147 There are however certain specific arguments against this view that need to be taken into account.

• Need to Apply Special Procedures. Special admiralty procedures apply to some ac­ tions in personam. The requirement for preliminary acts to be filed in collision cases is an example.148 Perhaps more significant are the special procedures govern­ ing the conduct of limitation actions.149 The need to comply with special pro­ cedures is not a strong argument against conferring in personam jurisdiction. There is no reason why lower courts should not be capable of applying the proposed uni­ form rules. However, there are strong arguments for excluding limitation actions from any general conferral of jurisdiction. The difficulty with such actions is the lack of any sum that would be clearly appropriate for determining lower court jur­ isdiction. In limitation actions the amount to which the defendant seeks to limit liability may be small, but the outstanding claims may be very large. It would be clearly inappropriate in such circumstances to allow the limitation amount to de­ termine jurisdiction. It would be equally inappropriate to allow the defendant to select one small claim out of what may be many and bring the limitation action in a lower court on the basis of that claim. Limitation actions should therefore be re­ stricted to superior courts. None of this applies to the hearing of a plea of limita­ tion by way of defence to a specific claim. There can be no objection to an inferior court dealing with the right to limit raised as a defence to a specific action in per­ sonam that falls within that court’s monetary limits: if established, the defence ap­ plies to that claim only. With this one exception, it can be concluded that ques­ tions of procedure do not preclude the conferral of in personam jurisdiction on courts of ordinary civil jurisdiction.

146. Non-contractual salvage is the most obvious example. But cf Navigation Act 1912 (Cth) s 318, which al­ lows salvage disputes where the amount claimed is less than S5 000, or where the value of the property salved is less than S20 000, or where the parties assent, to be heard by a County Court, District Court, or Local Court of a State of Territory. 147. cf New Zealand, Special Law Reform Committee on Admiralty Jurisdiction, Report (1972) (Beattie Com­

mittee) para 6(c): it is desirable that as many cases as possible, particularly involving pleasure craft and small marine cargo claims, within the monetary limits of the Magistrates' Courts, should be heard in those Courts. ... our experience is that the Magistrates' Courts have in the past dealt with many maritime matters, particularly those involving claims for damage to or loss of cargo, and we are strongly of the view that this should be encouraged. See also IM Mackay, ‘The Admiralty Act 1973 - Part II' [1976] N Z L J 387, 391-2. 148. For a discussion of the need to retain preliminary acts, see para 295-7. 149. See para 299 for a discussion of existing limitation procedures and those recommended for use under the

proposed uniform rules.

The Allocation o f Admiralty Jurisdiction / 187

• Need for Judicial Expertise. A more difficult argument to deal with is one which stresses the need for expertise in courts hearing admiralty matters150, and hence the inappropriateness of conferring even in personam admiralty jurisdiction on courts below Supreme Court level. But any area of law is capable of throwing up difficult cases. Neither in Australia nor elsewhere is subject matter jurisdiction allocated by reference to such a possibility. Insofar as there is any general principle governing the allocation of subject matter jurisdiction it is based on the monetary value of the disputed claim. It can always be argued that a particular subject would benefit

from a specialist tribunal but in general this argument is not accepted. The need for specialised court officials, local equivalents to the English Admiralty Marshal and Registrar, is confined to actions in rem. It is not relevant to the allocation of in personam matters.

Accordingly there should be a general vesting of in personam admiralty jurisdiction (apart from limitation actions) in lower courts of ordinary civil jurisdiction.

Allocating In Rem Admiralty Jurisdiction among Superior Courts

235. The Issue. It follows from the earlier argument in this chapter that State and Terri­ tory Supreme Courts should continue to exercise admiralty jurisdiction. The question is whether this jurisdiction should be exclusive or concurrent with Federal Court jurisdic­ tion. The general arguments for and against Federal Court jurisdiction were summarised

in para 220. More specific arguments favouring Federal Court jurisdiction in admiralty include the following:

• Federal Court process runs Australia-wide, thereby overcoming possible difficulties in serving process on and arresting ships moving from port to port around the Australian coast.

• Federal Court jurisdiction, even though only concurrent, goes some way to satisfy­ ing the demand that areas of law of international concern and over which federal legislative power is predominant should be within the jurisdiction of federal courts.

• There is a need for a centralised registry function in admiralty, especially for ca­ veats against arrest.151 • Such an allocation gives the plaintiff a choice. Competition between courts will prove beneficial to litigants. • Concurrent federal and Supreme Court jurisdiction in admiralty has been the sta­

tus quo since 1903. It has not caused significant difficulties in practice; on the con­ trary, the facility of High Court originating process in admiralty is used to a con­ siderable extent. The modern analogue of High Court original jurisdiction is Fed­

eral Court jurisdiction. Apart from criticisms which can be made of these arguments the following particular ar­ guments can be made against concurrent Federal Court jurisdiction:

• Because the Federal Court’s ordinary jurisdiction is not general, problems of pen­ dent and ancillary jurisdiction will arise.

150. In discussion with the Commission both Lord Brandon and Justice Sheen, the former and present English Admiralty Judges respectively, stressed the need for expertise. See also Great Britain, Committee on the Business of the Courts, Second Interim Report Cmd 4471, 1933, [1933-34] 11 Brit Session Papers (HC) I (Hanworth Committee) 10-15; and Anon, 'Why Abolish the Admiralty Court?’ (1934) 177 Law Times 54. 151. See para 293, 300.

188 / Civil Admiralty Jurisdiction

• Concurrent jurisdiction creates problems in devising an avenue for intermediate appeals that does not create, at the appellate level, fresh issues of pendent and an­ cillary jurisdiction.

This last point, that of appellate structure, will be discussed later.152 Before examining the remaining arguments it is useful to say something about how judges would be allocated to admiralty cases within the Federal Court. It is assumed that, were the Court to be given jurisdiction, there would be no formal specialisation of personnel but there would de facto be a small number of judges who would handle the bulk of the admiralty busi­ ness of the Court. Any greater specialisation would impose intolerable travel burdens on the Federal Court’s ‘admiralty judge’. At least for matters arising at short notice, and per­

haps for all admiralty matters, it would be prudent to assume that in those locations where there is only a single Federal Court judge it would be that judge who would deal with admiralty matters. Only in those centres where there is more than one resident Fed­ eral Court judge would a degree of specialisation be expected to occur.

236. The Need for a Court with Australia-Wide Jurisdiction. Apart from the general ar­ guments summarised in para 220-1, two particular arguments for an Australia-wide ad­ miralty jurisdiction have been made.

• National Service and Execution of Process. It is frequently asserted that there is a need to be able to take out a writ in rem and warrant of arrest which can be served or executed anywhere in Australia.153 This need arises because some ships spend only a brief time in port before moving around the Australian coast to another port. Alternatively, bail might be given and service of the writ accepted in order to prevent arrest. The bail might then prove inadequate after the ship has sailed.154 As appears from the figures set out in para 219, the High Court’s original admiralty jurisdiction has been quite extensively used, although whether the reason for this

relates to the Australia-wide jurisdiction of the High Court is not clear. Several un­ reported instances in which plaintiffs have resorted to the High Court for this reason were drawn to the attention of the Commission as illustrating this need.155 It is probably a factor in choosing to commence proceedings in the High Court in some cases at least.

• Need for National Registers. In chapter 14, it is proposed that the system for ca­ veats against arrest be retained and strengthened.156 For this system to be fully ef­ fective it needs to operate with a national register of caveats, which would neces­ sarily have to be based in the Federal Court.

On the other hand it is arguable that these functions are either not compelling arguments for Federal Court jurisdiction or can be met in other ways.

• Interstate Service and Execution of Warrants of Arrest. It is probable that the Ser­ vice and Execution of Process Act 1901 (Cth) does not at present allow interstate service of Supreme Court writs in rem on ships, and virtually certain that it does

152. See para 242-3. 153. eg BH McPherson, 'Admiralty Jurisdiction and the Federal Court' (1981) 55 Aust LJ 71, 78; Zelling Re­ port, 72; MLAANZ Submission (1983) 30. 154. It has been suggested that a ship may even divert to another State to avoid arrest: P Foss, Submission 78

(6 February 1986). 155. Garnock Engineering Co Pty Ltd, Submission 15 (21 September 1984); Justice BFI McPherson, Sub­ mission J7 (3 December 1984). 156. See para 300.

The Allocation of Admiralty Jurisdiction / 189

not allow interstate arrest.157 However there is no constitutional objection to the Commonwealth conferring Australia-wide federal admiralty jurisdiction on State Supreme Courts, and providing for interstate service and arrest either under the proposed legislation or the Service and Execution of Process Act 1901 (Cth).158 In

the absence of an Australia-wide Federal Court jurisdiction such a provision might well be desirable. But there are several reasons for preferring the Federal Court as a court to exercise a nationwide jurisdiction. If a writ in rem in the Supreme Court of State A could be served throughout Australia, the effect would be (since service

creates jurisdiction in admiralty over the merits without any need for a territorial nexus between the forum and the dispute) to give each Supreme Court a universal jurisdiction in admiralty based on service of the writ anywhere in Australia. Al­ though formally the basis for this jurisdiction would be that each Supreme Court

was an agent of the Commonwealth for the purposes of admiralty jurisdiction, this would be at least an apparent breach of the basic principle of territoriality of ser­ vice in rem, a principle which, it was concluded in chapter 6, it is clearly in Aus­ tralia’s interest to maintain.159 This problem does not arise with respect to arrest,

which is the execution of a jurisdiction already established. It is not obvious that the Supreme Court of a State is the appropriate agency for the exercise of admir­ alty jurisdiction over a ship which has never entered the waters of that State in re­ lation to a dispute between parties with no connection with the State. Moreover, if this solution were to be adopted, there would be 7 superior courts each with

Australia-wide jurisdiction. This could lead to forum shopping and to disputes be­ tween courts each of which would have jurisdiction over the same ship.160 • Need for a Register of Caveats against Arrest. At present caveats against arrest are virtually never used. It is uncertain to what extent this will change under the pro­

posals in chapter 14. It would be possible, though admittedly more cumbersome, for each court to maintain its own register of caveats (perhaps with some inter­ change of information between them). No other national admiralty register is pro­ posed. It can be argued that Federal Court jurisdiction should not be based on the

need for a single register of caveats against arrest. At most the facility for a nation-157. The Act defines 'suit' to include proceedings in rem and a ‘writ of summons’ to include any process by which a suit is commenced, s 4(1) provides: A writ of summons issued out of or requiring the defendant to appear at any Court of Record of a

State or part of the Commonwealth may be served on the defendant in any other State or part of the Commonwealth. Service under the Act requires a closer nexus before leave to proceed against a non-appearing defendant will be given. Thus the Act could not be used where the cause of action arose entirely in ports outside the territorial jurisdiction of the issuing court. In any event the argument that the Service and Execution of Process Act 1901 (Cth) allows service ex juris in actions in rem presents many difficulties, s 3 in using the term 'in rem’ is probably not referring to admiralty actions at all. The term ' in rem' seems to be referring to actions in which there is only one party (such as some kinds of probate actions or winding up actions). The connection is with the common law judgment in rem rather than admiralty actions in rem. Moreover the Act makes no provision for the arrest of the res. The High Court has refused to allow service of its process in rem outside the Commonwealth on the ground that, while it might be possible to effect service of the writ, there is no possibility of serving the warrant of arrest because it is directed to the Court's Mar­ shal or his deputy and the authority of the Marshal is territorially restricted. O nly if it [the res ] be within the jurisdiction can there be an arrest and the ability to arrest is, I think, inherent in the action in rem': Aichhorn & Co KG v The Ship M V ’Talahor' (1974) 48 ALJR 317, 318 (Stephen J), affd (1974) 48 ALJR 403. This reasoning supports the view that the Service and Execution of Process Act 1901 (Cth) does not authorise ex juris service of State or Territory Supreme Court admiralty process in rem. 158. On the other hand it is at least doubtful whether the jurisdiction of Territory Supreme Courts could be ex­ tended in this way: see para 71-2. 159. See para 88, 93-4, 96. 160. Which of several courts of service would have jurisdiction to sell a ship, for example? No doubt the prob­ lems could be resolved by legislative provision or judicial discretion, but it seems desirable not to multi­ ply the possibility of them occurring.

190 / Civil Admiralty Jurisdiction

al register is an additional advantage of Federal Court jurisdiction, if it is desirable to confer such jurisdiction for other reasons.

237. Avoiding Demarcation Disputes Between Courts. The strongest of the particular ar­ guments against Federal Court jurisdiction is that problems of pendent, ancillary or ac­ crued jurisdiction are likely to arise. The Federal Court is a court of limited subject mat­ ter jurisdiction. If it were to be given admiralty jurisdiction, issues could arise between the parties in the course of admiralty proceedings that, had they arisen in isolation,

would not have been within either admiralty jurisdiction or any other jurisdiction pos­ sessed by the Court. Similarly, there would be occasions when it was sought to join as a party someone who could not have been sued directly within the limited jurisdiction of the Court. The rules relating to accrued or pendent jurisdiction (including pendent party jurisdiction) developed by the High Court were outlined in para 227. In addition the Fed­

eral Court has associated jurisdiction, under s 32 of the Federal Court of Australia Act 1976 (Cth), over all matters of federal jurisdiction, including all matters of admiralty and maritime jurisdiction.161 On balance it is likely that the doctrine of accrued jurisdiction developed by the High Court, supported by the Federal Court’s associated jurisdiction will avoid most of the problems. A further and important point is that under a scheme of concurrent jurisdiction the plaintiff has a choice of court in which to commence. Many of the difficulties of divided jurisdiction referred to in para 220-1 have occurred in cases where one or another court had exclusive jurisdiction over a particular claim.

238. Transfer of Proceedings. A further way of resolving any residual problems of ac­ crued jurisdiction is through making adequate provision for the transfer of cases between courts exercising admiralty jurisdiction. A broad power of transfer is essential if the most appropriate venue is to be found, regardless of the courts involved. But with concurrent Federal Court jurisdiction, transfer to Supreme Courts may sometimes be necessary to avoid jurisdictional disputes. Provision should therefore be made for the Federal Court or a Supreme Court at any stage of any admiralty proceeding to transfer that proceeding to another court with admiralty jurisdiction in respect of the proceeding, either upon ap­ plication or of its own motion. The action should then proceed as if it had been com­ menced in the court of transfer. The question which court should maintain custody of the res in this situation is a matter best left to the discretion of the transferring court, given the variety of situations that could arise. But if a ship under arrest is in the custody of the transferring court it will usually be simpler for that court to retain custody of it, and to deal with it as if the case had not been transferred, though subject to any final judgment or order of the court to which the case was transferred. Specific powers to this effect should be conferred in the proposed legislation.

239. Conclusion. In the Commission’s view a clear case exists for concurrent in rem jur­ isdiction in admiralty to be vested in the Federal Court and in the Supreme Courts of each State and Territory. This meets the need for a court with Australia-wide jurisdiction, while avoiding any appearance of an infringement on the basic principle of territoriality of service in actions in rem. It also provides a basis for a national register of caveats against arrest, and for the growth of admiralty specialisation in the Federal Court, while retaining and maintaining the existing jurisdiction and expertise of Supreme Courts.

Parallel federal and State court jurisdiction under the Colonial Courts of Admiralty Act 1890 (UK) seems to have worked reasonably well since 1903. This proposal was generally

161. See para 195, where it was recommended that associated jurisdiction over all matters of admiralty and maritime jurisdiction be conferred on courts exercising jurisdiction under the proposed legislation.

The Allocation o f Admiralty Jurisdiction / 191

endorsed in submissions to the Commission162; indeed, with one exception, it can be said to represent a consensus view. The exception relates to the question of interstate service of Supreme Court writs in rem. A number of submissions urged this as an additional form of Australia-wide jurisdiction to the jurisdiction of the Federal Court.163 For the

reasons given in para 236, it is undesirable to provide for service ex juris of writs in rem without any requirement of a nexus with the State or Territory in question, and unneces­ sary to do so given that the Federal Court will have jurisdiction throughout Australia. However there may be some cases where, consistently with the arguments in para 236, service ex juris can properly be provided for. For example, a ship may be within the State or Territory when proceedings are commenced but may leave thereafter to avoid service and arrest.164 To deal with cases such as this, service ex juris of Supreme Court writs in

rem within Australia should be permissible where the res was within the State or Territory in question when the action was commenced, or at any later time during the currency of the writ. In addition, it is desirable to provide for interstate arrest of ships once service in rem has been effected within the State. Subsequent issues of custody of the res can be dealt with under the transfer power proposed in para 238. The legislation should accord­ ingly contain a provision to the effect that the courts exercising jurisdiction under it are to act in aid of each other, and the proposed Act and Rules should be framed so as to al­

low interstate arrest and other forms of judicial assistance.165

Allocating In Rem Jurisdiction to Lower Courts

240. Should In Rem Jurisdiction be Conferred on Lower Courts? No lower courts in Canada or the United States possess in rem jurisdiction. In New Zealand the Beattie Committee considered that ‘because of the very nature if the action itself and its conse­ quences’, jurisdiction in rem ought not to be given to lower courts.166 In England the County Courts have long exercised in rem jurisdiction subject to money limits and some fairly minor restrictions on subject matter.167 However, suggestions for further devolution of in rem jurisdiction have not been accepted.168 In Australia the Zelling Committee re-

162. eg Sir Harry Gibbs, Chief Justice of the High Court, Submission 29 (21 Feburary 1985) (see n 144); NJ Harper MP, Queensland Minister for Justice and Attorney-General, Submission 9 (27 January 1984); Sir Nigel Bowen, Chief Judge, Federal Court of Australia, Submission 12 (25 July 1984); Garnock Engineer­ ing Co Pty Ltd, Submission 15 (21 September 1984). The submissions listed in n 180 which strenuously opposed exclusive Federal Court appellate jurisdiction tacitly or expressly accepted concurrent original jurisdiction as appropriate. Concurrent jurisdiction (though of the High Court, not the Federal Court)

was proposed by the Zelling Committee; see para 232 n 141. 163. eg NJ Harper MP, Queensland Minister for Justice and Attorney-General, Submission 75 (7 January 1986); P Foss, Submission 78 (6 February 1986). 164. The need for service ex juris in such cases was affirmed by P Foss, Submission 83 (22 April 1986); Austral­

ian Mining Industry Council, Submission 86 (13 May 1986). 165. cf Family Law Act 1975 (Cth) s 47; Bankruptcy Act 1966 (Cth) s 29. See also para 190-2 (enforcement of in rem judgments). 166. Beattie Report, para 6(c). 167. See para 222. 168. The Hanworth Report, (1933) 8-9 endorsed the views of a Committee Appointed by the Lord Chancellor

to Consider Relations between the High Court and County Court (Lord Gorell, Chairman), Report. Lon­ don, 1908. The Gorell Report gave three reasons against further extensions. First, the admiralty court is an international court in that it gives judgments against foreign ships and their owners: ‘it is not satisfac­ tory to subject them to any but the superior court except in trifling cases'. Secondly, admiralty required judicial expertise which was only to be found in London. Thirdly, the Elder Brethren of Trinity House

were available to sit as assessors in London but there was no similar source of qualified and experienced assessors in the provinces. The Hanworth Committee added that 'the high standard which has been main­ tained must not be imperilled by devolution" (id. 9).

192 / Civil Admiralty Jurisdiction

ferred to the long history of English County Courts exercising admiralty jurisdiction both in rem and in personam in these terms: A similar historical basis does not exist in Australia. Here, admiralty jurisdiction began in, and has remained in, the Supreme Courts; and, after federation, the High Court also. So far as we

are aware there has never been any call in Australia to confer a restricted, or any, admiralty jurisdiction on County or District Courts.169 Arguments based on history can never be fully persuasive in determining what the law should be. The absence of demand in the past might be explained by the uncertain and unsatisfactory nature of the admiralty jurisdiction of superior courts in Australia. Confer­ ring admiralty jurisdiction on lower courts would not have resolved the major problems confronting potential admiralty litigants in Australia and might only have added to them. Once the major problems are overcome it is difficult to say with confidence that the more minor issue of litigants having to use costly Supreme Courts to pursue small admiralty claims in rem will not come in for criticism. It would certainly be unwise to draw any conclusions from the very limited and arguably invalid conferral of jurisdiction on the

Broome Local Court.170 The fact that, in some States at least, a significant proportion of the admiralty actions concern small vessels and occur outside the capital cities171 suggests that devolution to locally situated courts may prove attractive. The relative lack of use made of the County Court’s in rem jurisdiction in England is not a very meaningful guide as to how much use would be made of a similar facility in a geographically more dis­ persed country such as Australia.172 On the other hand there are strong arguments against any general conferral of in rem jurisdiction on lower courts, including the international character of the jurisdiction, the absence (in most cases) of any clear need for such a con­ ferral, and the dilution of expertise (especially in the arrest and custody of ships and as­ sociated questions) that would be likely to result.173 241. Conclusion. There is little justification for requiring what may be a straightforward claim for money due to proceed on a Supreme Court rather than lower court scale of costs just because a ship has been arrested as security. The cluttering of Supreme Court lists with small claims is also difficult to justify. At the same time a general conferral of in rem jurisdiction on lower courts is undesirable, in particular because of the dilution of expertise among court officials which would result. While the hearing on the merits of ac­ tions in rem in intermediate or lower courts may well be desirable, something more flex­ ible than a general grant of in rem jurisdiction is called for. A more effective approach would be to restrict the commencement of actions in rem to superior courts but allow re­ mittal of the hearing on the merits to inferior courts in appropriate cases. This would al­ low arrest, custody and sale to remain the province of superior courts and their officials, while permitting the merits to be decided in the court that would normally have tried an equivalent action in personam. This scheme would accomodate most of the arguments for and against in rem jurisdiction of lower courts, and this solution was generally supported during the Commission’s consultations. The main drawback is that such a provision would not readily allow decentralisation of admiralty jurisdiction in rem in areas where neither the Supreme Courts nor the Federal Court have a local registry. There may well be a need for a limited in rem jurisdiction over small claims in some ports where only

169. Zelling Report, para 13(3)(g). 170. See para 2 IS. 171. See MLAANZ Submission (1983) 25 (in relation to Queensland) 29 (more generally). See also para 219. 172. Already there have been suggestions that in rem admiralty jurisdiction should be conferred in Tasmania,

to deal with disputes involving fishing and pleasure craft and yachts. 173. Views expressed to the Commission were generally opposed to lower court in rem jurisdiction. A number of submissions suggested that the possible economic consequences involved rule out the right to arrest in lower courts: PG Willis, Deputy Corporate Solicitor, BMP Co Ltd, Submission 23 (12 February 1985) 7;

or at least require the right to be restricted (eg by reference to the value of the res rather than the value of the claim): JJ Hockley, Hon Sec Law Reform Committee, Victorian Bar, Submission 46 (23 April 1985).

The Allocation o f Admiralty Jurisdiction / 193

magistrates or intermediate courts sit. To meet this need the Governor-General should be empowered to proclaim particular inferior courts as courts in which in rem jurisdiction (subject to any limits set out in the proclamation) can be exercised under the legisla­ tion.174 Geographically isolated areas could thus be specifically catered for. Conferrals

could if necessary be restricted to particular types or sizes of claim or to particular classes of vessel. A broad power should be conferred on superior courts to remit actions in rem for hearing on the merits by lower courts. There should also be power to proclaim specif­ ic lower courts as courts having defined in rem jurisdiction under the Act; a court exercis­ ing in rem jurisdiction by virtue of such a proclamation should have the power to transfer the proceeding to a superior court where appropriate.

The Allocation of Appellate Jurisdiction

242. Final Appeals. The topic of final appeals is uncontroversial. Appeals to the Privy Council have been abolished.175 Whether intermediate appeals go to the Full Court of the Federal Court or to Full Courts or Courts of Appeal of State Supreme Courts, there should be a final appeal to the High Court of Australia. This should be subject to the gen­ eral restrictions on such appeals, and it follows that the special leave of the High Court will be required to bring an appeal. There is no reason why admiralty appeals should be treated differently to the general run of appeals.

243. Intermediate Appeals. Intermediate appeals can be put into two categories, those heard by a Full Court or Court of Appeal and those from lower levels of the hierarchy of courts which are heard by a single judge. It has not been suggested that any change be made in the second category. The question is what provision should be made for inter­

mediate appeals. There are two possibilities. Appeals could follow the ordinary channel to the Full Court or Court of Appeal176 1 7 7 , or all appeals could go to a Full Court of the Federal Court. The former preserves the status quo1,7 and allows State Full Courts a role in the continuing development of admiralty law. It retains their existing expertise, limited

though that necessarily is given the small number of admiralty actions currently heard, especially at the appellate level.178 A disadvantage is the possibility that desirable uni­ formity could be threatened if the various Full Courts develop the law in different direc­ tions. Any differences that did develop could only be resolved if litigants were willing to bear the cost of a further appeal to the High Court. There is something to be said on the grounds of promotion of uniformity for having all admiralty appeals in the first category

heard by a full bench of just one court. That court would have to be the Full Court of the Federal Court. On the other hand there seems to be a general judicial awareness of the international ramifications of admiralty and of the consequent need for uniformity. As was pointed out earlier, Australian courts do on the whole have regard to decisions of

courts in other Australian jurisdictions.179 Concentrating full court appeals in the Federal

174. The formula adopted in the text avoids any difficulty arising from the doubts as to whether federal juris­ diction can, under the Constitution, be vested by subordinate legislation or proclamation: see Cowen & Zines (1978) 181-4.

175. See "ara 30. 176. In the case of Territories appeals are heard by the Federal Court: Federal Court of Australia Act 1976 (Cth) s 24(1 )(b). It is proposed to discontinue this practice in the case of the Northern Territory. 177. The importance of maintaining existing lines of appeal was emphasised in a number of submissions to

the Commission: South Australian Crown Solicitor, Submission 36 (18 March 1985) 12; Hon T Sheahan MLA, New South Wales Attorney-General, Submission 48 (23 May 1985): Hon Justice D Yeldham, Sub­ mission 5/(10 October 1985). 178. See para 219. 179. See para 230. This point was stressed by the Chief Justice of the NSW Supreme Court: Sir Laurence

Street, Submission 63 (20 November 1985).

194 / Civil Admiralty Jurisdiction

Court might also have at least some effect in promoting expertise in admiralty appeals. But to confer exclusive appellate jurisdiction on the Federal Court may raise demarca­ tion problems, especially if that exclusive jurisdiction extended to admiralty actions in personam. There may well have been no need to distinguish in the original trial what was

and was not an admiralty matter, because the ordinary jurisdiction of the Supreme Court would have covered any in personam claim that did not fall within admiralty jurisdiction. Strong arguments against Federal Court appeals were addressed to the Commission, on these and other grounds.180 On balance it seems undesirable to risk creating demarcation problems with exclusive Federal Court appellate jurisdiction, especially in in personam cases. The ordinary channels of appeal should be retained.

180. Submissions to the Commission on this subject argued that exclusive Federal Court appeals would place State Supreme Courts in an inferior position: Hon LJ King, Chief Justice, Supreme Court of South Aus­ tralia, Submission 7 / ( 1 0 December 1985); might encourage litigants to begin in the Federal Court: Queensland Attorney-General, Hon NJ Harper, Submission 75 (7 January 1986), or would run against a general trend towards freeing up areas of exclusivity: Hon T Sheahan MLA, New South Wales Attorney- General, Submission 48 (23 May 1985). Strong opposition to any exclusive vesting of appellate jurisdic­ tion was expressed by State Attorneys-General and Chief Justices. In addition to the submissions already cited see. Hon John Young, Chief Justice, Supreme Court of Victoria, Submission 56 (45 November

1985); Hon DG Andrews, Chief Justice. Supreme Court of Queensland, Submission 66 (14 November 1985); Justice KJ Carruthers, Submission 69(21 November 1985).

12. Other Related Issues

Remedies

244. Introduction. This chapter discusses a number of related issues arising in the exer­ cise of admiralty jurisdiction. The issues are related both to the recommendations made earlier and to each other, in that they concern the relative effects of in rem and in per­ sonam actions, and especially their remedial effects. The issues to be discussed are:

• the relationship between arrest and Mareva injunctions; • the applicability of in personam remedies in actions in rem; • time limits in admiralty; • priority of claims, and the relationship between admiralty priorities and insolvency

or winding-up; • the interaction of arrest, possessory liens and statutory rights of detention as rem­ edies; • the recovery of pre-judgment interest in admiralty.

Arrest and Mareva Injunctions

245. Arrest and Mareva Injunctions Compared. A Mareva injunction is an order of a court to a party or other persons over whom the court has jurisdiction, directing the way in which property is to be retained or dealt with so as to ensure that the property will be available to satisfy any judgment in the action. Mareva injunctions are increasingly being obtained in relation to ships and cargo, both overseas and to a more limited extent in Australia. It is necessary to consider whether the proposed legislation should regulate the overlap between the availability of such injunctions and the ability to arrest in rem. Some preliminary points need to be made about Mareva injunctions. First, the Mareva injunc­ tion is an evolving remedy, and its precise contours have yet to be fixed.1 In particular the possible conflict with established admiralty practice has not been adequately ex­ plored. The ability to grant such injunctions has only recently been fully accepted by su­

perior courts in Australia.2 Secondly, Mareva injunctions only overlap with the security aspect of arrest in rem. not the jurisdictional aspect. To obtain a Mareva injunction there must first be an action in personam properly commenced within the jurisdiction of the

1. Hiero Ply Lid v Somers (1983) 47 ALR 605, 611 (Ellicott J): Riley McKay Ply Lid v McKay [1982] 1 NSWLR 264, 276 (CA). "Mareva" injunctions were first granted in 1975 by the Court of Appeal in England: see Nippon Yusen Kaisha v Karageorgis [1975] 3 All ER 282: Mareva Compania Naviera 5/1 i International Bulkcarriers SA [1975] 2 Lloyd's Rep 509 (CA). 2. Hiero Ply Ltd v Somers (1983) 47 ALR 605 (EC); Wheeler V Selbon Ply Lid trading as Parklands Nursery &

Ors [1984] 1 NSWLR 555 (NSW Industrial Court). The South Australian Full Court only recently over­ ruled its original denial of any power to grant a Mareva injunction: Devlin v Collins (1984) 37 SASR 98. Dicta in the Supreme Courts of Queensland and Victoria indicate that there are still doubts about the power to issue these injunctions in those States: Bank o f Neh- Zealand v Jones [1982] Qd R 466. 469 (Campbell J); Deputy Commissioner o f Taxation (Via v Rosenthal (1984) 16 ATR 159, 165 (Ormiston j).

196 / Civil Admiralty Jurisdiction

court.3 Thirdly, despite suggestions by commentators that Mareva injunctions should not be allowed to intrude into the area normally covered by arrest in rem 4, courts both in Australia and elsewhere have shown themselves willing, with little or no discussion on the point, to grant such injunctions to restrain ships, cargoes or bunkers from leaving the jurisdiction.5

• Prerequisites. Arrest is a legal remedy available as of right; the Mareva injunction is equitable and discretionary. In order to obtain a Mareva injunction the plaintiff will have to show that success is likely at the eventual trial, that there is a real dan­ ger that assets will be removed or dissipated so as render valueless any judgment obtained and that the injunction will not seriously interfere with the rights of third parties.6 For example, there may be difficulties in using a Mareva injunction to block the departure of a vessel when the cargo on board is the property of third parties.7 In admiralty, if the plaintiff is entitled to arrest the vessel, the inconveni­ ence or damage caused to third parties is not relevant.8 An injunction to prevent the only asset within the jurisdiction from departing may be refused if the defend­ ant has substantial assets abroad which are unlikely to be dissipated and which can

3. The Siskina (Cargo Owners) v Distos Compania Naviera SA [1979] AC 210; Sanko Steamship Co Ltd v DC Commodities (A 'Asia) Pty Ltd [1980] WAR 51. In the UK the decision in The Siskina has been reversed by the Civil Jurisdiction and Judgments Act 1982 (UK) s 25(1 )(a), 26(1) (s 25 not yet proclaimed). This al­ lows security obtained by arrest or Mareva injunction to be retained where proceedings have been or are about to be commenced in another European Economic Community jurisdiction, but it does not confer jurisdiction over the underlying dispute. 4. G Jones, ‘The Infiltration of Equity into English Commercial Law’ in BS Markesenis and JH H Wilems

(ed) The Cambridge-Tilberg Law Lectures 1979, Kluwer, Deventer, 1980, 49, 71; FD Rose, T h e Mareva Injunction — Attachment in Personam’ [1981] LM CLQ 177, 182; DE Charity, 'Mareva Injunctions: A Lesson in Judicial Acrobatics’ (1981) 12 JM LC 349, 360; T O’Neill, ‘Mareva Injunctions’ in ‘Mareva' In­ junctions, Lloyd’s of London Press, London, 1982, 8; W Hodgekiss, ‘Mareva Injunctions and their Re­

medial Alternatives’ in M Hetherington (ed) Mareva Injunctions, Law Book Co, Sydney, 1983, 96, 114. cf J Maskell, ‘The Cargo Owner’s Remedies — Theory and Practice’ in Maritime Law in Bills o f Lading, Lloyd’s of London Press, London, 1982, 7; DA Perry, ‘“ Mareva" or Arrest — The Choice’ in Charter- Parties Conference, Lloyd’s of London Press, London, 1982, 21. 5. The most extended judicial discussion is in The Rena A T [ 1979] QB 377, 407-10 (Brandon J). Other report­

ed cases include Elesguro Inc v Ssangyong Shipping Co Ltd (1980) 117 DLR (3d) 105 (Fed Ct); Irving OH Ltd v Biornstad, Biorn & Co (1981) 35 NBR (2d) 265; Pamar Fisheries Ltd v Parceria Marilima Esperanca LDA (1982) 53 NSR (2d) 338; Sanko Steamship Co Ltd v DC Commodities (A ’Asia) Pty Ltd [1980] WAR 51; Clipper Maritime Co Ltd v Mineralimportexport. The Marie Leonhardt [1981] 3 All ER 664; Galaxia Maritime SA v Mineralimportexport. The Eleftherios [1982] 1 All ER 796 (CA). There are in addition nu­ merous unreported cases: eg The Stolt Filia, High Court, England, 1980, noted in MA Grant, ‘The

Mareva Injunction Four Years On’ (1980) 130 NLJ 985, 986; Re The Vessel Shereen, High Court, Auck­ land, Sinclair J, 1981, discussed in DN Rogers, ‘The Action in rem and the “Mareva” Injunction: the Need for a Coherent Whole’ (1983) 14 JM LC 513, 528-9; Glebe Island Terminals Pty Ltd v Malaysian International Shipping Corp, NSW SCt, Rogers J, 22 June 1983, noted in (1983) 105 Lloyd's Marit L News­ letter 4. See also S Robertson, O btaining Security in the Far East — A Comparative Analysis' in Ocean

Carriers' Rights and Liabilities, Lloyds of London Press, London, 1982; W Tetley, ‘Canadian Maritime Law Judgments in 1982’ [1983] LM CLQ 603, 609; JL Jessiman, ‘The Mareva Injunction in British Colum­ bia' (1984) 18 UBC L Rev 143, 144; Charity (1981) 360. In Papua New Guinea there was doubt over the existence of any admiralty jurisdiction, and the Mareva injunction was proposed as a means of filling the gap: New Guinea Cocoa Export Co Pty Ltd v Basis Vedbaek [1980] PNGLR 205, 214. 6. There are some differences in practice between the States. On these requirements generally, see J Farmer,

‘Procedures and Enforcement’ in M Hetherington (ed) Mareva Injuctions, Law Book Co, Sydney, 1983, 35; M Tedeschi, 'The Mareva Injunction — An Update’ (1985) 13 ABLR 236, 241-2, 246-9. 7. Glebe Island Terminals Pty Ltd v Malaysian International Shipping Corp, unreported, NSW SCt, Rogers J, 22 June 1983, noted in (1983) 105 Lloyd's Marit L Newsletter 4. For the converse situation, seeking a

Mareva injunction to detain cargo aboard a vessel owned by a third party, see Galaxia Maritime SA v Mineralimportexport. The Eleftherios [1982] 1 All ER 796 (CA) where it was held, despite an offer by the plaintiff to indemnify the third party, that a Mareva injunction would not be granted if it seriously af­ fected a third party. 8. See The Jogoo [1981] 3 All ER 634. Whether this is satisfactory is discussed in para 302.

9° Γ-* 9s y-

Other Related Issues / 197

be reached by machinery for the reciprocal enforcement of foreign judgments.9 The question of dissipation of assets does not arise when seeking to arrest the res in admiralty.

• Subject Matter. A major advantage of the Mareva injunction is that it may be ob­ tained against all the defendant’s assets within the jurisdiction. Only the wrongdo­ ing ship or a surrogate ship may be arrested in admiralty10 and only a single ship may be arrested on any single cause of action.11 The Mareva injunction can be

very useful where a foreign-owned wrongdoing vessel has sunk but the proceeds of its insurance are to be paid within the jurisdiction. Taking the money outside the jurisdiction can be prevented, thereby forcing the owner to provide security.12 The extent to which the Mareva injunction can be used, not as an alternative to arrest

but simply to supplement inadequate security provided by a res which has been ar­ rested, is unclear. But there seems to be no objection in principle to both arresting in rem and (provided jurisdiction has been obtained over the defendant in per­ sonam) blocking other assets with a Mareva injunction.13

• Speed, Cost, Undertaking. A Mareva injunction may be able to be obtained more quickly than a warrant of arrest. The latter can only be obtained during registry opening times; the former can be obtained whenever a judge is available. A Mareva injunction may be a cheaper remedy than arrest in rem because the cost of maintaining a vessel under arrest can be high.14 But the commercial reality is that in most cases where either property is arrested or dealing with it is restrained by

Mareva injunction a security or guarantee of some sort is offered to secure the im­ mediate release of the property.15 Only rarely will the cost of custody be an issue. On the other hand a plaintiff seeking a Mareva injunction will have to give an undertaking in damages to the defendant and normally also to indemnify any third parties who may be affected.16 If it turns out that the injunction was unjusti­ fied the plaintiff may have to pay substantial damages.17 In contrast the plaintiff proceeding in rem is not generally subject to such a risk.18

• Effect. A Mareva injunction does no more than prevent assets from being removed from the jurisdiction or dissipated within it. It does not give the plaintiff a pref­ erence as against other creditors.19 Nor does it prevent the assets subject to the in­ junction being used to pay debts due to other creditors20 or for legal or living ex-9. Glebe Island Terminals Ply Ltd v Malaysian International Shipping Corp. unreported, NSW SCt, Rogers J,

22 June 1983, noted in (1983) 105 Lloyd's Marit L Newsletter 4; Montecchi v Shimco UK Ltd[ 1979] 1 WLR 1180. 10. See para 107, 109-10, 204, for the definition of res for this purpose. 11. The Banco [1971] P 137 (CA). See para 210. 12. See eg Iraqi Ministry o f Defence v Arcepey Shipping Co SA. The Angel Bell [1981] QB 65. 13. In Irving Oil Ltd v Biornstad, Biorn <5 Co (1981) 35 NBR 265, an attempt to obtain an injunction to pre­

vent the removal of a sister ship following the arrest of the wrongdoing vessel was denied on the facts, but apparently not objected to in principle. See also The Rena K [1979] QB 377, 410 (Brandon J). 14. W Tetley, ‘Maritime Liens for Cargo Damage' in Ocean Carrier's Rights and Liabilities. Lloyd’s of Lon­ don Press, London, 1981, 19; Perry (1982) 15.

Allen v Jambo Holdings Lid [1980] 2 All ER 502, 505 (Lord Denning MR). Z Ltd v A [1982] 1 All ER 556 (CA). Maskell (1982) 8, suggests that a plaintiffs concern at the potential expense is often the significant practical consideration favouring arrest over Mareva injunction. Tetley (1981) 19-20.

Only where the plaintiff acted maliciously or with gross negligence will damages be awarded: The Strathnaver (1875) 1 App Cas 58 (PC); Maskell (1982) 8; Perry (1982) 2. But see the Vice Admiralty Vex­ atious Arrests Act 1901 (NSW) s 5 and the Arrest of Ships Act 1848 (NSW) s 2, in force in Queensland by virtue of its Constitution Act 1867, s 33. There is no equivalent legislation in force in other parts of Aus­ tralia. Whether the present position should be changed is discussed in para 301-2. 19. Iraqi Ministry o f Defence v Arcepey Shipping Co SA The Angel Bell [1981] QB 65. 20. ibid; Riley McKay Ply Ltd v McKay 11982] 1 NSWLR 264 (CA).

198 / Civil Admiralty Jurisdiction

penses.21 On the other hand, if the res is arrested, it or the proceeds of its sale re­ main intact in the hands of the court until judgment is obtained or bail or alternat­ ive security put up. The plaintiff who procured the arrest still runs the risk that other creditors will take priority under the system of priorities that operates in ad­ miralty. In this respect arrest may not be much superior to a Mareva injunction from the point of view of a claimant who ranks low on the admiralty scale of priorities.

• Summary. There are many points of difference between arrest in rem and Mareva injunctions. From the point of view of the plaintiff the former is superior in most respects.22 The major advantage of the injunction is that it is available to the full amount of the claim and against any or all of a defendant’s property. But despite the conceptual and theoretical differences between the two remedies, both will ac­ hieve the same practical result in many factual situations. Both put strong pressure upon the ship’s owner or operator to put up security acceptable to the plaintiff in order that the vessel may sail on schedule.23 On the other hand there will always be situations in which the ability to arrest will be needed. Arrest ‘is a powerful weap­ on and whatever other remedies may emerge it is unlikely to lose its value’.24

246. Need for Reform? On one view this overlap between the two remedies is no cause for concern. A plaintiff who is in the position of having additional, alternative or sup­ plementary remedies is entitled to rely on them. At the end of the day no more than the amount adjudged to be due can be recovered. In examining the opposing view three sit­ uations need to be distinguished. The first is where a Mareva injunction obtained in an ordinary action in personam freezes a traditional admiralty type of res, a ship, cargo or freight, and the action could not, on the facts, have been brought in rem. One argument against the use of a Mareva injunction in such a situation is that admiralty should be the sole avenue by which ships may be detained by way of interim relief. If Australia were contemplating becoming a party to the 1952 Arrest Convention which, on one interpreta­ tion, purports to set out the exclusive basis upon which ships may be subject to saisie con­ servatoire, this argument would require serious consideration.25 Since this is not the case, the argument has little weight. A second situation is where, on the facts, the plaintiff could arrest a ship in admiralty but instead relies upon a Mareva injunction. It might be said that, where admiralty provides a remedy, only that remedy should be available, in particular because admiralty has the experience of dealing with the problems ancillary to

21. PCW (Underwriting) Agencies Ltd v Dixon [1983] 2 All ER 158. 22. In The Ship 'Federal Huron' v OK Tedi Mining Ltd, unreported, PNG Supreme Court, 20 January 1986, the Full Supreme Court of PNG unequivocally rejected an argument that the Mareva injunction could provide an adequate substitute for admiralty jurisdiction in Papua New Guinea: reasons for judgment 48. 23. It is in this sense (and only in this sense) that Lord Denning MR was correct to say that a Mareva injunc­

tion ‘operates in rem just as the arrest of a ship does': Z Lid v A [1982] 1 All ER 556, 562. See also The Span Terza [1982] I Lloyd’s Rep 225, 229 (Donaldson LJ): Maskell (1982) 7. 24. Perry (1982) 2. See also Thomas (1980) para 113. 25. It is not entirely clear whether the general availability of Mareva injunctions in England to detain vessels

puts that country in breach of the 1952 Brussels Arrest Convention. The Convention defines a series of matters as constituting a maritime claim (art 1(1)). It then provides that a ship, but only one ship, of a contracting state may be arrested in the jurisdiction of any other contracting state ‘in respect of any mari­ time claim, hut in respect o f no other claim’ (art 2, emphasis added). The Convention defines ‘arrest" as the ‘detention of a ship by judicial process ..." (art 1(2)). Whether this is broad enough to cover detention of a ship by means of a Mareva injunction which operates in personam does not appear to have received any discussion. If it is, a breach of the Convention would seem to occur if a Mareva injunction is used to de­ tain a ship on a non-maritime claim, or to detain more than one ship on a maritime claim. Whatever the position with the Convention, the CMI draft revision of the Convention (Lisbon, 1985) art 1(2) is explicit: ‘arrest’ is defined to include 'restriction on removal’ and 'other conservatory measures'. In the view of the BMLA, the inclusion of Mareva injunctions in the definition of "arrest" is unacceptable: DJL Watkins, Secretary, British Maritime Law Association, Submission 49 (12 June 1985).

Other Related Issues / 199

the detention of a ship.26 But the grant of a Mareva injunction is discretionary and courts can readily tailor the terms of any injunction to the difficulties which may occur in a par­ ticular case. Those terms can also be readily varied. The third situation is less easily re­ solved. Here the plaintiff proceeds both in rem against a ship or cargo and at the same time proceeds in personam in the same matter and obtains a Mareva injunction against

other assets of the defendant. It can be argued that the ability of a plaintiff to do this up­ sets a carefully balanced, internationally sanctioned, admiralty regime of in rem proceed­ ings in which one ship and one ship only can be arrested.27 If this is proper, why should not more than one ship be arrested in rem on a single claim? If a ship is arrested and at the same time (or subsequently) a bank account is frozen under a Mareva injunction on the same claim, what is the point of restricting the categories of property which can be ar­

rested to the traditional ones? One answer lies in the fact that admiralty actions, unlike Mareva injunctions, have jurisdictional and not only remedial consequences. The reasons for not extending the action in rem to non-maritime claims or property were outlined in chapter 6. On the other hand there is certainly no international consensus on restricting the detention of ships (including their detention through Mareva injunction) to maritime

claims. Until such a consensus emerges, Mareva injunctions in addition to arrest in rem even on full maritime liens should be allowed. Certainly this is the position elsewhere: there is no good reason for Australia not to take a similar approach.28

247. Need for Legislative Provision? The question is whether some legislative provision is desirable to give effect to this conclusion. One possibility would be not to refer to the matter at all in the proposed legislation. The trend in the case law in Australia and other common law jurisdictions is fairly clearly in favour of allowing Mareva injunctions as a

parallel interim remedy to arrest in rem. Although it might be asked why the point should be left to the vagaries of judicial development, especially by overseas judges, the Mareva injunction is itself a judicially-created remedial device which is still in the course of de­ velopment. It would be premature to cast in legislative form any scheme involving such

injunctions. A second objection to the laissez-faire solution is that the State Supreme Courts have shown little co-ordination in their approach to the existence and extent of the remedy until now. Acceptance of the Mareva injunction in some States has lagged well behind others and aspects of the remedy still vary considerably from jurisdiction to jurisdiction.29 Unless the proposed legislation makes specific provision, the situation in

practice may well be that on any given set of facts some courts exercising admiralty juris­ diction will have, as part of their ordinary jurisdiction, the power to issue Mareva injunc­ tions while others will not. On the other hand it may well be that the argument for uni­

formity will induce those Australian jurisdictions which have not yet fully accepted Mareva injunctions to do so, at least when exercising federal admiralty jurisdiction. On

27. 28.

cf the Mareva injunction cases Clipper Maritime Co Ltd v MineraUmponexport: The Marie Leotthardt [1981] 3 All ER 664 (detained ship causing port congestion); Galaxia Maritime S/I v MineraUmponexport: The Eleftherios [1982] 1 All ER 796 (position of crew of detained ship). The British Maritime Law Associ­ ation has recently expressed the view that the Mareva injunction, when used to detain a ship

does not emphasise sufficiently the concern felt on the central issue of custody and control. Under the procedure which has developed with the action in rem the Admiralty Marshal assumes practical responsibility for custody and, perhaps more important from the point of view of third parties, acts as a focal point so that all matters in relation to the vessel can be properly regulated by the court. It

may be questioned whether it is appropriate to permit Mareva injunctions in respect of vessels when arrest procedure is generally available. Letter to the Commission from BMLA, 13 June 1984, summarising the responses of members to a BMLA questionnaire on, among other matters, Mareva injunctions as they relate to ships.

1952 Arrest Convention, art 3; The Banco [1971] P 137. See para 142. This conclusion also makes it unnecessary to explore the relevance to admiralty (if any) of the provisions relating to foreign attachment in the Supreme Court Act 1958 (Vic) s 152-9 and the Common Law Pro­ cess Act 1869 (Qld) s 27-46. See para 245 n 2 & 6.

200 / Civil Admiralty Jurisdiction

balance the issue of Mareva injunctions and admiralty should be left to the courts. In the circumstances the advantage of leaving scope for judicial development in a developing area such as this is decisive.

In Personam Remedies in Actions In Rem

248. The Issue. In 77m Conoco Britannia 30 the plaintiff sought, amongst other remedies, an order for specific performance of a contractual obligation in a proceeding in rem. Jus­ tice Brandon considered the argument that such an order was beyond admiralty jurisdic­ tion in rem, noting that

if a defendant does not appear to a claim for equitable relief, such as specific performance, a situation may arise where any order made would be unenforceable and therefore the court might refrain from making such order. It seems to me that this has nothing to do with jurisdic­ tion. It may be that, if an action in rem for specific performance is brought, and if the defend­ ant does not appear to it, and if the plaintiff then moves for judgment in default of appear­ ance, a question will arise as to whether the court ought to make an order which it may not be able to enforce. I do not see, if I am right in what I have said up until now, how at that stage a question can arise as to whether the court has jurisdiction to make the order in the strict sense.

It may be that, in some other case hereafter, the court will have to decide questions of that kind, but they do not arise for decision at the moment.3 0 31 3 2

Justice Brandon went on to observe that the issue is linked with the larger question of the nature of the action in rem, and the particular issue of the rule that the res is (apart from costs) the limit of liability in an action in rem?2 The issue raised by Justice Brandon should not be resolved in the proposed legislation. Courts upon which admiralty jurisdic­ tion is conferred under the proposed legislation will possess whatever equitable remedial powers they have as part of their ordinary jurisdiction. The way in which such powers are exercised in admiralty actions in rem should be left to those courts. Any alternative would involve an attempt in the proposed legislation exhaustively to define the characteristics of the action in rem, something not attempted in any of the overseas admiralty legislation examined in this Report, and something which would tend to produce an admiralty juris­ diction which was inflexible and not open to further development.

Time Limits

249. The Present Position. The present position on limitation of actions in admiralty in Australia is unclear. In the 19th century the Admiralty Court did not apply any rule which fixed the time after which rights were extinguished or remedies were no longer available. Rather a flexible doctrine of laches was used to prevent stale claims being

30. [1972] 2 QB 543. 31. id, 554. 32. The Volant (1842) 1 Wm Rob 383; 166 ER 616. See Wiswall (1970) 171-3 on the evolution of this rule. On the effect of appearance in an action in rem see para 143.

Other Related Issues / 201

litigated.33 In practice laches is very rarely raised in admiralty.34 The relevant English de­ cisions all concern the extinguishment of maritime liens35, but it seems clear that laches applies also to statutory rights in rem.36 The basic admiralty rule has been affected by stat­ ute in what can conveniently be categorised as three different ways: general limitation of actions legislation, limitation on particular topics without specific reference to admiralty, and provisions specifically directed at admiralty jurisdiction. One general point is that the Colonial Courts of Admiralty Act 1890 (UK) s 4 requires that any local law in a Brit­ ish possession which

affects the jurisdiction of or practice or procedure in any court of such possession in respect of the jurisdiction conferred by this Act, or alters any such Colonial Law as above in this section mentioned, which has been previously passed, shall, unless previously approved by Her Maj­

esty through a Secretary of State, either be reserved for the signification of Her Majesty’s pleasure thereon, or contain a suspending clause providing that such law shall not come into operation until Her Majesty’s pleasure thereon has been publicly signified in the British pos­ session in which it has been passed. Arguably any State law which alters limitation periods in admiralty falls within the ambit of s 4. None appear to have complied with its manner and form requirements. A second general point is that the limitation of actions legislation operates by reference to cate­ gories of actions based on common law concepts such as contract, tort, mortgage and so

forth. While these are appropriate to describe the vast majority of actions which fit within either the present or an expanded admiralty jurisdiction, there are some exceptions to this. The most significant is salvage.37 Salvage may be contractual but need not be. Hence a limitation Act purporting to cover the field may not in fact do so if it relies entirely on

non-admiralty terminology.38

33. The clearest statement of this position is to be found in The Key City 81 US (14 Wall) 653, 660 (1871) cited with approval by Mocatta J (after referring to the relevant English authorities) in The Aliena [1974] 1 Lloyd’s Rep 40, 45: 1. That while the Courts of Admiralty are not governed in such cases by any statute of limitation,

they adopt the principle that laches or delay in the judicial enforcement of maritime liens will, under the proper circumstances, constitute a valid defence. 2. That no arbitrary or fixed period of time has been, or will be, established as an inflexible rule, but that delay which will defeat such a suit must in every case depend on the peculiar equitable

circumstances of that case. 3. That where the lien is to be enforced to the detriment of a purchaser for value, without notice of the lien, the defence will be held valid under shorter time, and a more rigid scrutiny of the cir­ cumstances of the delay, than when the claimant is the owner at the time the lien accrued. The origins of the doctrine of laches in admiralty are obscure: it seems to have been borrowed from

equity about the middle of the 17th century. See J Haneman, ‘Admiralty: The Doctrine of Laches’ (1963) 37 Tut L Rev 811,811-2. 34. In The Alletta [1974] 1 Lloyd’s Rep 40, 44 it was said that the last reported English case was The Kong Magnus [1891] P 223 (in which the defence failed despite a delay of eleven years in prosecuting the

claim), cf the position in the United States: during the period from 1940-77, of the personal injury and death cases reported in American Maritime Cases, some 35 were dismissed for laches where a suit was commenced within 3 years, while 29 were allowed to proceed where suit was brought more than 3 years later. 41 cases within 3 years were allowed to proceed and 48 cases were dismissed after 3 years. US Con­ gress, House Report No 96-737, ‘Statute of Limitations-Maritime Torts' [1980] US Code Cong o f Admin

News 3303-4. Since 1980 a uniform 3 year period has been applied in the United States for bringing ac­ tions for personal injury or death arising out of a maritime tort: 46 USC 763a. 35. The Bold Buccleugh (1851) 7 Moo PC 267; 13 ER 884; The Europa ( 1863) 2 Moo PC (NS) 1; 15 ER 803 and the two cases cited in n 34. 36. In The Alletta [1974] 1 Lloyd’s Rep 40, 44 the plaintiff argued that laches applied to both maritime liens

and statutory rights in rem in the same way but the court did not need to decide the point. In The Helene Roth [ 1980] 2 WLR 549, the point was accepted as axiomatic. 37. For another example (the admiralty action of restraint) see para 47. 38. cf Great Britain, Law Reform Committee, 21st Report. Final Report on Limitation o f Actions. 1977, Cmnd

6923 (Orr Committee) para 4(4) where it is noted that perhaps the original reason why admiralty actions were excluded from the general rules of limitation of actions was simply 'that the Statutes of Limitation were originally drafted in terms of the common law forms of action'.

202 / Civil Admiralty Jurisdiction

• General Limitation of Actions Legislation. Turning to the first category, general leg­ islation, the Limitation Act 1974 (Tas) s 8(1), which copied the relevant English legislation39, provides that, apart from an action to recover seamen’s wages, the rel­ evant parts of the Act ‘do not apply to a cause of action within the Admiralty juris­ diction of the courts of this State that is enforceable in rem’. It is not clear whether this applies only to actions actually commenced in rem or also covers actions brought in personam but which might have been brought in rem.40 The New South

Wales and Northern Territory Acts likewise apply to seamen’s wages but not ‘to a cause of action in rem in Admiralty’.41 The Limitation of Actions Act 1974 (Qld) s 10(6)(a) omits any reference to actions for seamen’s wages but does not apply to admiralty actions ‘enforceable in rem\ 42 Equivalent legislation in the other Austral­ ian jurisdictions does not refer directly to admiralty jurisdiction. It may be pos­ sible to argue that admiralty actions fall outside the definition of ‘action’ in the

Limitation Act 1935 (WA) s 38(3) for the purposes of limitation of tort and con­ tract actions. This refers to ‘such actions as are in the nature of actions at common law’. This argument is not open with respect to the South Australian and Victorian legislation.43 The former Act, however, contains a specific provision in the section dealing with contract and tort, applying a six year limit to ‘actions for seamen’s wages’.44 The fact that this particular type of admiralty action is singled out might perhaps be taken to reflect a view that the legislation is not otherwise intended to impose any limitation period in admiralty actions.

• Limitation on Particular Topics without Reference to Admiralty. A second category of legislation is that which creates either a new right of action or a special pro­ cedure on some topic and attaches to it a particular time limit within which the ac­ tion must be brought.45 In principle it might be expected that, if the right is as­ serted in admiralty, the limitation period attached to the right is equally applicable in admiralty.46 This problem has not arisen in Australia, partly no doubt because

39. Limitation Act 1939 (UK) s 2(6), repealed by Limitation Amendment Act 1980 (UK) s 9. 40. There are no reported decisions on the provision: Orr Committee, para 4(2)— (3). 41. Limitation Act 1969 (NSW) s 22(1); Limitation Act (NT) s 20(2). 42. Note also that s 26 which imposes limitation periods in actions in respect of mortgages and charges ‘does

not apply to a mortgage or charge on a ship': s 26(6). 43. Limitation of Actions Act 1936 (SA) s 3(1) ('action' includes legal proceedings of all kinds); Limitation of Actions Act 1958 (Vic) s 3(1) (‘action" includes any proceeding in a court of law). 44. Limitation of Actions Act 1936 (SA) s 35(g). The six year limit on such actions has prevailed in admiralty

at least since the enactment of 4 & 5 Anne c 3, s 17 (1705). It is not clear whether s 17 of the 1705 Act (or s 35(g) of the 1936 Act) applies also where statutory provisions have allowed for recovery of master's wages and of other debts in the same manner as seamen’s wages may be recovered: see The Chieftain (1863) Br & L 212; 167 ER 340 where the point was considered but not decided. Section 17 of the 1705 Act was repealed in England by the Limitation Act 1939 (UK). But it would appear to have formed part of the admiralty jurisdiction conferred by the Colonial Courts of Admiralty Act 1890 (UK). It may follow that the local repeals of 4 & 5 Anne c 3, s 17 are ineffective (eg the repeal by the Limitation Act 1969 (NSW) Sch 1; Limitation Act 1974 (Tas) Sch 1) insofar as they purport to affect admiralty actions because they have not been enacted in any of the ways required by s 4 of the 1890 Act. This problem is not re­ ferred to in New South Wales Law Reform Commission, First Report on the Limitation o f Actions (LRC 3) Sydney, Government Printer, 1967, para 8, 129 where the repeal of 4 & 5 Anne c 3 is recommended. 45. eg Seamen's Compensation Act 1911 (Cth) s 6(1) (generally 6 month period for claims brought under

Act); Annual Holidays Act 1944 (NSW) s 13 (18 month period for recovery of holiday pay due under the Act); Long Service Leave Act 1955 (NSW) s 12(1) (2 year period for recovery of leave due under the Act). See para 255 for the related question of special limitation periods in respect of certain defendants. 46. See The Caliph [1912] P 213, 215 (Bargrave Deane J).

Other Related Issues / 203

the Colonial Courts of Admiralty Act 1890 (UK) has restricted additions to admir­ alty jurisdiction.47 • Admiralty Limitation Legislation. A third category of legislation is that specifically addressed to limitations of maritime actions. Where two Acts, one in this category

and the other in the previous category, are both relevant to a particular action, it becomes a question of statutory interpretation to determine which is controlling.48 The most important example of legislation in this third category is the Navigation Act 1912 (Cth) s 396 which governs actions both in personam and in rem, 49 This

provides for a two year limit on all actions, whether in admiralty or otherwise, arising out of ship collisions50 or salvage.51 A one year limit from the time of pay­ ment is imposed on actions for ‘contribution in respect of an over-paid proportion of any damages for loss of life or personal injuries’. Sub-section(3) gives a general discretion to the court to extend these limits.52 A proviso states that a court

shall, if satisfied that there has not during such period been any reasonable opportunity of arresting the defendant ship (not being a Government ship) within the jurisdiction of the Court, or within the territorial waters of the country to which the plaintiff’s ship belongs or in which the plaintiff resides or has his principal place of business, extend any such period to an extent sufficient to give such reasonable opportunity. There is a considerable body of English authority on how both the general dis­

cretion and the proviso are to operate53, though there do not appear to be any re­ ported cases in Australia.

47. But the Navigation Act 1912 (Cth) s 262 (assuming it is validly enacted) allows actions under the local equivalents to Lord Campbell’s Act 1846 (UK) for wrongful death to be brought in rem. These local equivalents all attach a time limit varying from one to six years for the bringing of an action (eg Fatal Ac­ cidents Act 1959 (WA) s 7 (12 months)). To complicate the picture still further some of the limitation Acts expressly exempt actions in rem from the Lord Campbell's Act time limit (eg Limitation Act 1969 (NSW) s 19 read with s 22(1)). 48. eg The Alnwick [1965] P 357 (two year limitation period in the Maritime Conventions Act 1911 (UK) s 8

governing admiralty actions in collision prevails over the three year period governing actions for loss of life provided in the Law Reform (Limitation of Actions) Act 1954 (UK) s 3). 49. The provision derives from the Maritime Conventions Act 1911 (UK) s 8, an Act which did not extend to Australia. See also Limitation Act 1969 (NSW) s 22(2)— (5), Limitation Act 1974 (Tas) s 8(2)— (6) and the

Limitation Act (NT) s 20(3)— (5), which all in broad terms also follow the 1911 Act. Other State legislation may also be relevant: see eg Supreme Court Civil Procedure Act 1932 (Tas) s 11(11 )(e). For other ex­ amples of special time limits in Commonwealth legislation see Protection of the Sea (Civil Liability) Act 1981 (Cth) s 8(1) (applying art VIII of the 1969 Pollution Convention: this provides broadly for a 3 year

limitation period for claims brought under the Convention); Sea-Carriage of Goods Act 1924 (Cthj s 6 (which incorporates in any contract within the ambit of the Act the one year limitation on bringing suits for loss or damage stipulated by the Hague Rules of 1924). 50. 'Collision' is a convenient shorthand. As Brandon J observed in The Narwhale [1975] 2 All ER 501, 507

the Maritime Conventions Act 1911 (UK) s 8. although intended to implement the Brussels Collision Convention of 1910, did so in terms covering a considerably wider class of cases than the Collision Con­ vention itself. 51. For extensive discussion of s 396, particularly as it relates to salvage claims, see Burns Philp it Co Lid v

Nelson it Robertson Ply Lid (1958) 98 CLR 495. Neither before Taylor J nor on appeal was the point raised that s 262 might be invalid, since it 'affects the jurisdiction of or practice or procedure in' a court operating under the Colonial Courts of Admiralty Act 1890 (UK). See para 27, 56. 52. For a summary of the principles upon which the equivalent provision in the Maritime Conventions Act

1911 (UK) s 8 is exercised see The Albany and The Marie Josaine [1983] 2 Lloyd’s Rep 195. Both the 1910 Collision and the 1910 Salvage Conventions permit this discretion in very similar terms. Art 10 of the lat­ ter is set out in para 254. 53. See Thomas & Steel (1976), para 845-6 for references and discussion. There do not appear to be any re­

ported English decisions on the operation of the alternative locus of arrest (foreign territorial waters etc); but see The Adamic Faith [1978] 2 M L] 187. There has to be a 'reasonable' opportunity to arrest: see The Largo Law (1920) 15 Asp MLC 104 (10 days anchored in roadstead, never entered port, not a reasonable opportunity). In The Sahiscount [1984] I Lloyd's Rep 164. 168, Sheen J commented that the reasons for granting extensions in the Conventions upon which the Maritime Conventions Act 1911 (UK) s 8 is based 'may have less validity now that it is permissible to arrest a sistership of the offending ship'.

204 / Civil Admiralty Jurisdiction

250. International Considerations. Some multilateral maritime conventions provide a fixed period of two years for claims arising under those conventions subject to whatever rules the forum deems appropriate for interruption to or suspension of this period.54 A variation on this trend are treaties that stipulate that any extension or suspension of time under the local rules cannot extend the total limitation period beyond three years.55 As already noted, the 1969 Pollution Convention provides for a basic limitation period of three years.56 The 1926 Liens and Mortgages Convention art 9 provides that ‘liens shall cease to exist, apart from other cases provided for by national laws, at the expiration of one year’. Liens for necessaries have only a six month duration. These periods may be ex­ tended in cases when it has not been possible to arrest the wrongdoing vessel in the terri­ torial waters of the claimant’s state. But the maximum period even with an extension is three years from the date of origin of the claim. The 1967 Liens and Mortgages Conven­ tion art 8 provides a one year period for all claims, which ‘shall not be subject to suspen­ sion or interruption, provided however that time shall not run during the period that the lienor is legally prevented from arresting the vessel’.57 The 1952 Arrest Convention makes no reference to limitation periods. 251. United Kingdom Reforms. A British inquiry into the Limitation Act 1939 (UK) (the Orr Committee) examined the question of the exemption of admiralty actions from ordi­ nary limitation periods.58 The result of their inquiries

showed ... that there is no good reason for the retention of this exception from the normal rules of limitation ... We doubt whether abolition would create any difficulties in practice, and those whom we consulted were generally agreed that it would be desirable to apply the general law to Admiralty proceedings, whether in personam or in rem. One memorandum submitted to us suggested that there should be, for Admiralty proceedings, a short period coupled with a discretion to extend it in proper cases, but since the tenor of our evidence is that there is noth­ ing in particular about Admiralty proceedings which distinguishes them, for limitation pur­ poses, from other proceedings, we consider that we would not be justified in recommending a discretionary approach for Admiralty proceedings when we do not favour such an approach in general. The Admiralty Solicitors Group suggested that application of the normal rules of limitation could cause difficulty in the case of a mortgage of a ship, but it seems to us that the period of 12 years provided for by s 18 of the 1939 Act should suffice. We therefore recom­ mend that the 1939 Act should be amended so as to repeal the specific exceptions for Admir­ alty matters.59 The Report noted that treaty provisions required special limitation periods for particular kinds of actions but recommended that any discretion given by the treaties to suspend or extend such periods should be used, as far as was possible consistently with the treaty ob­ ligations, to bring these periods into line with those applicable under the general law.60 It is difficult to reconcile this view with that expressed by Lord Diplock during debate on the Supreme Court Bill 1981 (UK). The point was made in chapter 7 that, to the extent that ordinary limitation periods apply, expanding the number of claims upon which the wrongdoing ship could be arrested notwithstanding a change of ownership would be to convert ordinary contract debts into secret charges on the ship with a life of six years. In

54. International Conventions for the Unification of Certain Rules of the Law with respect to Collision be­ tween Vessels, and Relating to Assistance and Salvage at Sea, Brussels, 23 September 1910 (UKTS (1913) No 4) art 7 and art 10 respectively. Australia is a party to both treaties, cf CMI Draft Convention on Sal­ vage, Montreal, 29 May 1981 (Benedict (1983) vol 6, Doc 4-2A) which gives no right or discretion to ex­ tend beyond two years under any circumstances. 55. Convention Relating to the Carriage o f Passengers and their Luggage by Sea, Athens, 13 December 1974

(Benedict (1983) vol 6, Doc 2-2) art 16. Australia has signed but not yet ratified this treaty. 56. See para 175, n 180. Australia is a party. 57. See para 94. Australia is not a party either to the 1926 or the 1967 Convention. 58. Orr Committee, para 4(1). 59. id, para 4(4)— (5). 60. id, para 4(7).

Other Related Issues / 205

198! Lord Diplock took the view that it was inappropriate to create charges having such a long life ‘compared with other maritime liens, whose duration is generally short — one year or, possibly, only one voyage’.61 The short life given maritime liens under both the 1926 and the 1967 Liens Conventions has already been noted.62 The effect of the legisla­ tive change consequent on the Orr Committee’s recommendations63 would appear to be to increase the duration of maritime liens to either three or six years depending on

whether the cause of action on which the lien is based lies in tort or contract.

252. Abolition of Special Admiralty Rules. One option is to make no provision in the proposed legislation with respect to limitation of actions. None of the recent legislation on admiralty jurisdiction in Canada, New Zealand, South Africa64 or the United King­ dom deals with the issue. Nor has the present position apparently created any difficulties in Australia. There appears to be no articulated need for reform at present, although this

might change if the recommendation in chapter 10 for surrogate ship arrest is accepted. But it is unsatisfactory to leave unresolved problems which have been clearly identified simply because these problems have remained largely theoretical so far. As a basic prin­ ciple, and putting aside for the moment the requirements of conventions to which Aus­ tralia is a party, actions in admiralty should conform as far as possible to the general

limitation regime.65 Because many of the causes of action can be brought either in admir­ alty or in ordinary courts it is undesirable that the choice of forum should be determined solely by the fact that limitation periods differ. This is clearly correct for actions in per­ sonam. The question how to achieve this result is discussed below. It is less clear that this

argument should prevail for actions in rem. It is arguable that the action in rem is a spe­ cial type of action which should follow its own limitation rules. In much the same way that a statutory right of action in rem may be defeated by a change in ownership of the res, thereby relegating the plaintiff to an action in personam, it is possible to have a right

of action in rem defeated by a special time bar or by laches, the plaintiff likewise being relegated to an action in personam. This argument is more persuasive where the in rem ac­ tion is barred before the in personam action than in the converse situation. To allow an action in rem to survive because, say, no opportunity to arrest has arisen through the con­ tinued absence of the ship, and yet not to allow an action in personam on the same inci­

dent or dispute because time had run out, seems incongruous. The rationale for limitation periods66 appears to be defeated by an ability to bring an action in rem many years after

61. Great Britain 418 Part Debs (HL 5th Series) (26 March 1981) 1309. 62. See para 250. 63. The Limitation Amendment Act 1980 (UK) s 9 removed from the principal Act, the Limitation Act 1939 (UK), the special provision which exempted admiralty actions in rem from the operation of that Act: the

principal Act ‘shall apply to any cause of action within the Admiralty jurisdiction of the High Court as it applied to any other cause of action'. The principal Act itself was consolidated later in the same year: see now Limitation Act 1980 (UK). 64. But cf Admiralty Jurisdiction Regulation Act 1983 (S Af) s 11(1 Me) (claims of specified types to enjoy

high priority in any ranking of claims only if brought within one year of the cause of action arising: otherwise relegated to lower priority). 65. Although the focus here is on the period of limitation, the limitation legislation also contains provisions dealing with such matters as when the running of time may be suspended or interrupted, the exercise of

discretion by a court to extend the statutory period and the time limits on bringing counterclaims. These would also be included. 66. The Orr Committee, para 1(7) stated the rationale as follows: (a) first, to protect defendants from stale claims:

(b) secondly, to encourage plaintiffs to institute proceedings without unreasonable delay and thus enable actions to be tried at a time when the recollection of witnesses was still clear, and (c) thirdly, to enable a person to feel confident, after the lapse of a given period of time, that an in­ cident which might have led to a claim against him is finally closed.

206 / Civil Admiralty Jurisdiction

the event simply because the res has not entered the jurisdiction since the claim arose.67 To allow actions in rem to survive the limitation period which would bar the correspond­ ing action in personam would be to add a further advantage to those already possessed by the action in rem over the action in personam. A ship should not in this respect be treated any better than a defendant in personam under the general law. In addition, whatever the position a century ago68, communications are neither so slow nor unreliable as to make a requirement that the plaintiff attempt to arrest the ship in other jurisdictions an unduly onerous one. That requirement might well be thought a corollary of the international character of admiralty, in particular the absence of any need for a nexus between the for­ um and the cause of action. For these reasons extension of time based on absence of the

res from the jurisdiction is not justified. More generally the certainty of a fixed date after which the action can be brought neither in rem nor in personam (subject to whatever dis­ cretion to extend, suspend or interrupt the running of time exists under the general law) would outweigh whatever advantages might be gained by allowing extension under the doctrine of laches or through some general statutory discretion on a case by case basis. This leaves the question of allowing the doctrine of laches or some variation thereof to shorten the period in which the claim may be brought in rem. Not allowing this has the advantage of applying to admiralty actions the same regime that applies to all other ac­ tions. But it is open to the objection that this option gives maritime liens a longer life than may be desirable, as noted in para 251. However Australia is not a party to either the 1926 or the 1967 Maritime Liens and Mortgages Conventions, the main international texts which espouse a short (generally one year) period for enforcing maritime liens. Nor is there any suggestion that Australia should become a party. Even though the one year period represents such international consensus as there is on the duration of liens69, this should not necessarily determine Australia’s position. Other conventions to which Aus­ tralia is a party require different periods for actions arising out of salvage, collisions or some types of vessel-sourced oil pollution.70 These special requirements will have to be adhered to in any event. But otherwise the proposed legislation should follow the English approach and apply the ordinary limitation rules to admiralty actions in rem. Australia can adjust the legal position to comply with other conventions if and when it decides to ratify them.

253. Difficulties of Implementation. If the ordinary limitation regime is to apply to ad­ miralty actions in rem and in personam, the details of how this is to be achieved require some discussion. There are difficulties in merely stating in the proposed legislation that the general provisions of the limitation of actions legislation of the forum shall apply to all admiralty matters commenced within that jurisdiction. One difficulty — though a mi­ nor one — is that that legislation is not often drafted with admiralty terminology in mind. The main difficulty this might cause, non-contractual salvage actions, cannot occur be­ cause the Navigation Act 1912 (Cth) s 396(3) and the provision discussed in para 254 will cover the field with respect to salvage claims. Other rare types of admiralty actions may cause difficulty.71 But the chief difficulty with applying the existing general State and Ter­ ritory rules to admiralty actions is their lack of uniformity. The Limitation Act 1935

67. In The Kong Magnus [1891] P 223, 230 Sir James Hannen P attempted to meet this criticism. In disallow­ ing a defence of laches despite a lapse of 11 years, he said that at the eventual trial ‘the defendants will certainly have the benefit of every presumption which can fairly be made in their favour by reason of the absence of any witness’. 68. cf The Charles Amelia (1868) LR 2 A & E 330; The Kong Magnus [1891] P 223. 69. See para 94 on the limited acceptance of the Maritime Liens and Mortgages Conventions. These Conven­

tions are currently under study by the CMI with a view to possible revision, although it appears that the I year period is unlikely to be altered: F Berlingieri, ‘Maritime Liens and Mortgages — A Progress Report'. CMI News Letter (September 1983) 1, 2-3. 70. See para 250. 71. eg the action of restraint (para 47).

Other Related Issues / 207

(WA) s 38 uses time periods of four, six, and twelve years on matters relevant to admir­ alty. The Limitation Act 1969 (NSW) would apply a six year period to most admiralty ac­ tions, with a twelve year period applying to ship mortgages if the present exclusions on admiralty actions were overridden. The Limitation Act (NT) would apply a three year period to most admiralty matters, with twelve years for ship mortgages. Quite apart from the different time periods, the provisions for suspension or interruption of time, the exer­ cise of discretion to extend time and so forth vary considerably.72 In addition there are variations in time limits in the State and Territory legislation giving special rights of ac­ tion (such as Lord Campbell’s Act actions). When an action is commenced in the Federal

Court the appropriate limitation period is determined by the limitation legislation of the State or Territory in which the action is commenced. Because Federal Court process runs Australia-wide the possibility of ‘registry shopping’ for an advantageous limitation period is obvious.73 If this is thought undesirable, the proposed legislation could provide that limitation periods for actions commenced in the Federal Court be determined by the limitation legislation of, say, the Australian Capital Territory. This does, however, mean that most practitioners wishing to commence in the Federal Court will have to contend

with an unfamiliar limitation Act. Reliance on the general legislation will confront prac­ titioners commencing in a State or Territory Court with legislation which is already fa­ miliar. On the other hand the alternative of a complete admiralty limitation regime to be

contained in the proposed legislation also has serious drawbacks. Drafting a complete limitation scheme is no easy task. It could be simplified by borrowing from one of the ex­ isting State or Territory Acts, but difficult choices would remain in selecting an appropri­ ate Act from which to borrow. There is also the problem of choosing the appropriate periods. Perhaps a lowest common denominator approach could be used. This would en­ sure that the more powerful remedy of in rem proceedings could never be commenced when a time bar would prevent the litigation of the same issue in personam in any of the ordinary courts in Australia. This would result in a limitation periods of three years for

all admiralty actions except those in respect of most aspects of mortgages where the period would be twelve years.74 There is clearly room for disagreement over whether the three year period is too short. But in the light of the limitation periods in international maritime conventions three years is appropriate.75 A further issue, if there is to be a spe­

cial admiralty limitation scheme, is whether it should apply to admiralty actions brought in personam as well as in rem : should the dividing line be between admiralty and other actions or between actions in personam and in rem? In either case the practitioner will have to be familiar with a special admiralty regime as well as the general regime of the forum. On balance the better alternative, in the absence of a federal Limitation Act, is to rely on existing State and Territory limitation legislation. The proposed legislation should provide as follows:

72. In addition the Limitation Act 1969 (NSW) operates not merely to bar the remedy but to extinguish the right: see NSWLRC 3, para 14. Although the point is rarely important in practice, it does have significant implications in conflict of laws (cf Law Commission of England and Wales, Report No 114, Classification o f Limitation in Private International Law. HMSO, London, 1982). Conflicts of law are more common in admiralty than in many other areas of the law. 73. This problem is not limited to admiralty jurisdiction. For examples of forum shopping in the High

Court’s diversity jurisdiction to avoid local time limits see Robinson v Shirley (1982) 39 ALR 252: Foxe v Brown (1984) 58 ALR 542; Fielding v Doran (1984) 60 ALR 342. A uniform federal Limitation Act ap­ pears desirable. 74. Limitation Act (NT) s 12, 27. 75. Limitation problems can arise in general average cases because the cause of action accrues when the gen­

eral average act is done, not when the average adjustment is published. The latter may be some years after the former and hence outside the limitation period but it is only when the adjustment is published that it may become clear than an action will lie: see eg Castle Insurance Co Ltd v Hong Kong Islands Shipping Co Ltd [1983] 3 All ER 706 (PC). The problem however is one of the law of general average, not admir­

alty or limitation of actions.

208 / Civil Admiralty Jurisdiction

• Time limits specifically applicable to admiralty actions under Commonwealth, State or Territory legislation (including time limits applicable under international conventions to which Australia is a party and which are part of Australian law) should continue to apply.

• In all other cases, general State and Territory limitation legislation should apply to all actions commenced in admiralty.

• Where State or Territory legislation fails to deal with a particular category of ad­ miralty action the limitation period should be three years. This is needed to cater for those rare kinds of admiralty actions which do not fall within the common law- oriented wording of the general legislation.

• In exercising any discretion under the general legislation to suspend, interrupt or extend the running of time, the absence of the res from the jurisdiction should not be a relevant consideration.

254. The Salvage and Collision Conventions. Australia is a party to the 1910 Collision and Salvage Conventions. Article 10 of the Salvage Convention provides:

A salvage action is barred after an interval of two years from the day on which the operations of assistance or salvage terminate. The grounds upon which the said period of limitation may be suspended or interrupted are determined by the law of the court where the case is tried. The High Contracting Parties reserve to themselves the right to provide, by legislation in their re­ spective countries, that the said period shall be extended in cases where it has not been pos­ sible to arrest the vessel assisted or salved in the territorial waters of the State in which the

plaintiff has his domicile or principal place of business.

Art 7 of the Collision Convention is in virtually identical terms. Section 396 of the Navi­ gation Act 1912 (Cth) gives effect to this, though in one respect it seems to be in breach of the Conventions.76 The Conventions only permit local law to determine the circum­

stances under which the running of time may be interrupted or suspended: extensions of time may only be allowed by local rules on the ground that it has not been possible to ar­ rest the ship within the specified jurisdictions. On the other hand s 396(3) provides that any court hearing a collision or salvage action ‘may, in accordance with the rules of court, extend any period mentioned in this section to such an extent and on such con­ ditions as it thinks fit’. The subsection also provides for a mandatory extension of time with no maximum limit where it has not been possible to arrest the ship in the jurisdic­ tions specified in the Conventions. Because collision and salvage actions may be brought

in non-admiralty courts, s 396 needs to remain in the Navigation Act. If s 396 is to be re­ tained, the provisions recommended in para 253 will preserve its operation in respect of admiralty actions, including actions in rem. Section 396 will need to be reviewed in the event of international developments (either the amendment of the Salvage and Collision Conventions or the adoption of a new and more widely accepted Convention on Mari­ time Liens and Mortgages). In the meantime it can be argued that the provision, which seems to have caused few problems in practice77, should be left alone. However, the rec­

ommendation in para 253 that an extension of time not be available on grounds of the lack of opportunity to arrest the ship concerned locally might be thought to require some amendment to s 396(3), which allows an automatic and indefinite extension on this ground (the Conventions permit such an extension but do not require it). This aspect of s 396(3) presents other difficulties, since it is not clear whether reasonable opportunity to

76. IH Wildboer, The Brussels Salvage Convention. Sijthoff, Leyden, 1965, 261, commenting on the equivalent provision in the Maritime Convention Act 1911 (UK) s 8. 77. This is true both of s 396 and its overseas equivalents, eg Maritime Conventions Act 1911 (UK) s 8.

Other Related Issues / 209

arrest includes a reasonable opportunity to arrest a surrogate ship78 or (in the Australian context) to arrest the wrongdoing ship in another State.79 8 0 Given the discrepancy between s 396(3) and the two Conventions, and the failure to revise those Conventions to take into account more recent developments in limitation of actions and surrogate ship arrest, there is no simple answer. On balance s 396 should be retained for the time being in its application both to actions in personam and in rem, but s 396(3) should be amended to delete the provision for an extension of time where it has not been possible to arrest the ship. If this is done, extensions of time will remain available under s 396(3) in appropri­

ate cases, and the availability of arrest will be one factor to be taken into account in as­ sessing the reasonableness of the plaintiffs application for an extension.

255. Limitation Periods Applying to Certain Defendants. In The Burns60, an action in rem was brought against a ship owned by the London County Council. The Council re­ lied for its defence on a statute which required actions against it to be brought within six months of the cause of action arising.81 The Court of Appeal held that the statute only

protected the Council in actions brought against it in personam. An action in rem was an action against the ship, not against the Council, and was not barred by statute. The reas­ oning placed considerable reliance on the personification theory. Given the general swing away from that theory in the 20th century and the difficulty of reconciling The Burns with decisions in analogous cases82, it cannot be confidently said that The Bums would be fol­ lowed by an Australian court. The point is of diminishing importance due to the modern trend of abolishing special limitation periods which apply by reference to the identity of the defendant.83 But examples can still be found.84 It would not be appropriate for the proposed legislation to suggest any repeal of these provisions in State legislation as they affect admiralty actions. Since most of these provisions concern government departments or non-commercial agencies, against whom an action in rem will not be available in any

case85, the point seems of minor significance, and accordingly no provision need be made to deal with it.

78. See The Alnwick [1965] P 357, 364 (Hewson J); The Preveze [1973] 1 Lloyd's Rep 202, 204-6 (Mocatta J); The Sahiscount [1984] 1 Lloyd's Rep 164. 168-9. cf Orr Committee, para 4(6), commenting that the matter requires further consideration. Requiring a plaintiff to pursue a surrogate ship may be unfair in view of priorities and other considerations. It can also be expensive: eg The Sahiscount [1984] 1 Lloyd’s Rep 164,

166, where the plaintiff was attempting to track the movements of 46 sister ships. On the other hand in some cases it may not matter to the plaintiff which ship is arrested: eg The Preveze [1973] 1 Lloyds Rep 202, 207. 79. Either by transferring the case to the Federal Court or through the facility for interstate arrest recom­

mended in para 236, 239. Problems could arise over the scope of s 396: Wildboer (1965) 259 argues that the Convention should not be interpreted as covering actions for apportionment of a salvage award pre­ cisely in order to avoid this result. Decisions of Spanish and Italian courts are cited in support. On the

same reasoning Wildboer argues that an action for contribution by one who has paid the total amount of the salvage claim is outside the scope of the Convention provision on limitation of actions: ibid. 80. [1907] P 137. 81. Public Authorities Protection Act 1893 (UK) s 1(a). 82. eg, actions against a state-owned vessel implead the state: The Parlemenl Beige (1880) 5 PD 197; The

Broadmayne [1916] P 64; The Cristina [1938] AC 485. Actions against a ship owned by a debtor are caught by insolvency provisions dealing with actions against debtors: see para 258. For an analysis of The Burns in terms of the competition between the personification and procedural theories see Wiswall (1970) 199-202. 83. On this trend see New South Wales Law Reform Commission, Report No 21, Third Report on the Limita­

tions o f Actions — Special Protections. Sydney, Government Printer, 1974, para 58-71. Such special periods have been generally abolished in New South Wales: Notice of Action and Other Privileges Abol­ ition Act 1977 (NSW). 84. eg Harbours Act 1936 (SA) s 172, a provision which allows 6 months for bringing actions 'against the

Minister or any other officer or person for anything done under this Part [of the Act)'. 85. See para 199.

210 / Civil Admiralty Jurisdiction

Ranking of Claims in Admiralty

256. The Present Position. Most commonly the amount of a claim made against the res will be less than the value of the res. Even where more than one claim is brought, the to­ tal of the claims will still usually be less than the value of the res. However there will be some cases in which, after all questions of validity of claims against the res have been de­ termined, the value of the outstanding claims exceeds the value of the ship. In admiralty,

claims are not paid rateably. The Admiralty Court has long had jurisdiction to determine the priorities between competing claims.86 In exercising the jurisdiction courts have adopted a broad discretionary approach with rival claims ranked by reference to considera­ tions of equity, public policy and commercial expediency, with the ultimate aim of doing that

which is just in the circumstance of each case. This is not however to suggest that the law is ca­ pricious, erratic or unpredictable. Arising from the ‘value’ framework within which the Courts operate there have emerged various principles which are capable of providing reliable sign­ posts to the likely attitude of the Courts. Such indeed, on occasions, is the degree of predict­ ability that many commentators have been tempted to represent the operative principles as firm ‘rules of ranking’. Whilst this approach is understandable it would appear not to be strict­ ly accurate, for such ‘rules of ranking’ are no more than visible manifestations of an underly­ ing equity, policy or other consideration. Upon the underlying equity, policy or other consid­ eration being displaced, either for want of substantiation or from the competitiveness of a greater equity or policy, so also the ‘rule’ becomes inoperative or inapplicable. In the realm of priorities there would appear to be no immutable rules of law, but only a number of guiding principles ...87 In Australia legislation has made only very minor inroads on this general equitable pol­ icy.88 The recent reforms of admiralty jurisdiction in Canada, New Zealand and the

United Kingdom have not touched on the question of priorities. In contrast the Admir­ alty Jurisdiction Regulation Act 1983 (S Af) s 11 explicitly gives to courts exercising juris­ diction under that Act jurisdiction to determine priorities on the application of any inter­ ested party. More importantly, it contains a complete set of rules for determining such priorities.89 These rules are substantially those recommended by the American Maritime

Law Association which in turn are based on the 1967 Maritime Liens and Mortgages Convention.90 The general failure of both this Convention and its 1926 predecessor to se­ cure widespread acceptance has already been noted.91 There is therefore no single, agreed, international model which Australia should follow. Because of the great complex­ ity of the topic it is not one upon which international agreement is likely to be forthcom­ ing. Any comprehensive set of rules for ranking of claims has to cover the ranking inter se of claims of the same class and type, for example one wages claim with another, or one claim of necessaries with another; the ranking inter se of claims of the same class but of different types, for example, a maritime lien for seamen’s wages with a maritime lien for

86. Thomas (1980) para 411. 87. id, para 418 (footnotes omitted). 88. Navigation Act 1912 (Cth) s 83(2) (‘lien for seamen's and apprentice’s wages shall have priority of [ sic ] all other liens’), s 315(2) (life salvage payable in priority to all other claims for salvage); Shipping Regis­

tration Act 1981 (Cth) s 39 (registered mortgages inter se ). Some State and Territory legislation also con­ tains provisions which affect priorities in admiralty: see eg Queensland Marine Act 1958 (Qld) s 70(2) (seamen's wages); Marine Act (NT) s49(I) (seamen's wages). Other statutory provisions may also have a limited impact on priorities in that they allow for the payment of certain types of expenses as a priority over satisfaction of outstanding claims against the res : see eg the Navigation Act 1912 (Cth) s 323(2) (wreck). 89. Compare s II with McGuffie (1964 & 1975) para 1574, which attempts to summarise the rules developed

by the English courts. 90. South African Law Commission, Report on the Review o f the Law o f Admiralty. 1982, para 7.6. But the ranking of maritime claims under the existing law in the United States differs widely from the Convention scheme: Berlingieri (1983) 2. 91. See para 94.

Other Related Issues / 211

salvage, or statutory rights in rem in respect of claims for necessaries and for towage; and the ranking as between the classes of claims, that is maritime liens, mortgages, and statu­ tory rights in rem. In addition the rules have to cater for claims outside the normal scope of admiralty such as

the claim of a possessory lienee, of an undertaking such as a dock or harbour endowed with particular statutory rights and powers, of a corporate liquidator, of a trustee in bankruptcy or of a judgment creditor. Nor will the issues be necessarily confined to substantive claims for the priority of costs may equally be involved. In the realm of priorities the [Admiralty] Court is

therefore frequently called upon to rank claims which are diverse in their legal source and nature, and to engage in a cautious diplomacy between itself and other divisions of the High Court. Further, the complexity of the Court’s task may be made even more difficult by the ap­ pearance of one or more foreign claimants pursuing their remedy in the English Admiralty.92

The relationship between actions in rem. possessory liens and statutory powers to detain and sell ships will be considered in para 263-6.

257. Options for Reform. The basic options for dealing with the ranking of claims are:

• to bring admiralty actions under the ordinary rules of insolvency, in particular the Bankruptcy Act 1966 (Cth) and the Companies Act 1981 (Cth) and its State and Territory equivalents; • to make no provision; • to codify the law, either as it presently exists or with modifications; • to deal with specific problems that have arisen or might be expected to arise, other­

wise preserving (but not attempting to state) the existing law.

The main argument for ranking claims in admiralty according to the general law on in­ solvency is to demystify admiralty: what is appropriate for ordinary insolvencies ought to be equally applied to ship insolvency. This argument cannot be supported. Even if ad­ miralty were to be abolished as a separate jurisdiction there would be good grounds for preserving at least some of the special admiralty rules of ranking.93 The provisions of the

Bankruptcy Act 1966 (Cth), particularly s 109 which creates a scale of priorities, were not drafted with maritime claims in mind.94 In any event this Report does not recommend the abolition of admiralty jurisdiction.95 There would appear to be no sufficient reason to dispense with one of the key characteristics of admiralty, its special rules of priorities. A disadvantage of making no provision at all is that it leaves the law inaccessible. In the ab­ sence of any Australian textbook or modern case law on the topic the practitioner is forced to rely on English substitutes.96 Codification would avoid this problem. But a leg­

islative restatement would tend to lack flexibility. It may not be able to do justice be­ tween the competing claims in novel or unusual fact situations. Nor would it be able to

92. Thomas (1980) para 412. For an Australian example of possible conflict between courts, consider how a State or Territory Supreme Court would exercise its jurisdiction under s 66(6)(b) of the Shipping Registra­ tion Act 1981 (Cth) (court may make such orders as it thinks fit for distribution of proceeds of mortga­ gee’s sale of ship). Would admiralty rules as to priorities be applied? Could the holder of a maritime lien go to the same court in its admiralty jurisdiction and enforce his priority over the mortgagee according to

admiralty priorities? 93. eg the rule that the maritime lien for salvage has priority over all other liens which attached before the salvage services were rendered. Had the res not been salved the earlier lien-holders would have had no res against which to claim: see The Lyrma (No 2) [1978] 2 Lloyd's Rep 30, 33 (Brandon J). 94. The same can be said of the Companies Act 1981 (Cth) s 441 and its State and Territory counterparts. 95. See para 86. 96. cf McGuffie (1964 & 1975) para 1574 where the restatement of the current law in something akin to legis­

lative form occupies nearly 4 pages; Admiralty Jurisdiction Regulation Act 1983 (S Af) s 11 which con­ tains 10 sections and 19 subsections. For difficulties which have arisen with these provisions see para 259 η 116.

212 / Civil Admiralty Jurisdiction

adapt over the course of time to changes in the maritime world.97 Although the flexibility of the present rules has been criticised98, the balance of arguments supports making no provision in the present legislation. In the absence of evidence of deficiencies in the pres­ ent rules, no case has been made out either for a codification which incorporates reforms or for provisions directed to reform of particular rules, leaving the general scheme in its present uncodified state. If in the future specific problems are brought to light the better option for dealing with them would be the narrower one, avoiding a general codification. However, two problems require more detailed discussion. The first is the relation between in rem proceedings and the bankruptcy or insolvency of the relevant person. The second is the effect of surrogate ship arrest on priorities.

258. Admiralty Proceedings and Bankruptcy or Insolvency. Although not all the problems under this heading directly affect priorities, it is convenient to discuss them together. The description by Thomas of the position in England is equally applicable to Australia:

The law of corporate liquidation and bankruptcy seems to have developed with little regard to the Admiralty proceeding in rem. Certainly it is difficult to fit the Admiralty proceeding into the legislative language of the relevant statutes which regulate the winding up of companies and bankruptcy. Yet the need for the latter to accommodate the action in rem and the poten­ tial conflict between the two processes is plain. A res may concurrently be the subject of an ar­ rest in the Admiralty Court and an asset capable of liquidation in a company winding up or personal bankruptcy. In such a circumstance it is important for a maritime claimant to be able to ascertain whether it is the jurisdiction of the Admiralty Court or some other court which prevails and which mode of legal process is available for the satisfaction of the claim. Most ships today are operated by commercial companies, many of which are one-ship companies,

and therefore in practice the inter-relationship between an action in rem and a winding up is likely to be of much greater importance than the relation the Admiralty proceeding bears to a bankruptcy proceeding.99

These issues are not addressed by the Supreme Court Act 1981 (UK).100 If the law reports are a reliable guide, the theoretical uncertainties cause few problems in practice; there are few reported cases in England and none in Australia. However, it is useful to indicate problems, actual or potential, thrown up by the English cases.

• The Issues. In both bankruptcy and corporate liquidation the basic method of pro­ ceeding is to pool all the debtor’s assets and to pay creditors according to their pri­ ority out of the pool. In order to make this workable it is necessary to restrict the right of creditors to proceed against the assets of a debtor other than through the pool.101 An action in rem to enforce a maritime lien (and, in some cases, a statutory right in rem l02) may be brought against a ship whether or not the shipowner would be personally liable. This raises the question whether such an action is nonetheless

97. cf The Royal Wells [1984] 3 All ER 193 where it was held that the ancient rule that the wages claims of the crew had priority over the wages claim of a master of a vessel was no longer just. Under present con­ ditions the master, officers and crew were all employees of the shipowner and a claim for wages by a mas­ ter of a ship ranked pari passu with claims for wages by the members of the crew. 98. eg AGL Stewart-Richardson, ‘Liens on Ships and their Priorities' [1960] J o f Bus Law 44, 50. 99. Thomas (1980) para 99. But in Australia the importance of bankruptcy may be rather greater because of

the significant volume of admiralty litigation here which involves small fishing and pleasure craft. The only provision in the Companies Act 1981 (Cth) which explicitly refers to ships is s 200( 1 )(d) which ex­ empts charges on locally registered ships from the general requirement to register charges on company property. 100. But cf s 21 (6) which gives to the High Court, sitting in admiralty, jurisdiction to determine questions of

title to the proceeds of sale of a res which has been sold by order of the court exercising admiralty juris­ diction. 101. Bankruptcy Act 1966 (Cth) s 58(3); Companies Act 1981 (Cth) s 371(2). See also id, s 402 (voluntary wind­ ing up). 102. Supreme Court Act 1981 (UK) s 21(4). See para 136.

Other Related Issues / 213

caught by insolvency provisions which bar actions against the debtor.103 It appears that in this situation the theoretical distinctiveness of the action in rem is ignored; an action in rem is treated as an action against the debtor.104 Another question which has arisen is when courts will exercise their discretion to allow actions to

proceed independently.105 A distinction has been drawn between actions to enforce a maritime lien and to enforce a statutory right in rem, 106 The maritime lien at­ taches to the res from the moment that the claim arises. The holder of the maritime lien ranks as a secured creditor under insolvency legislation and will always be given leave to enforce the charge despite the existence of a winding up order

against the debtor shipowner.107 The position is less clear when a statutory right in rem is involved. In part this is because of the uncertainty as to when an action to enforce a statutory right in rem can be said to be commenced.108 In England the plaintiff becomes a secured creditor once the action has commenced.109 1 1 0 Canadian courts have taken a different approach and do not allow a claimant to become a secured creditor by enforcing a statutory right in rem.n0 In England, if the plaintiff

has acquired the status of secured creditor, the maritime lien rule applies. But even if the plaintiff has not yet formally acquired this status, the English courts may ex­ ceptionally exercise their discretion and allow the plaintiff to perfect security.111 As a general proposition the English courts recognise that, where admiralty and gen­

eral insolvency rules or courts are in competition and the issue of a sale of a ship arises, it is preferable that admiralty conduct the sale. For only it can sell the ship free of all liens and encumbrances and thus obtain the best price.112

• Need for Legislative Provision? The (admittedly few) decided English cases give sufficient guidance on the more obvious problems which are likely to arise. They also indicate a general spirit of co-operation between the Admiralty Court and those dealing with insolvency and winding up. There is no reason to assume that

similar co-operation will be lacking in Australia. It is therefore recommended that the proposed legislation make no special provision on the point.

103. The Constitution [1965] 2 Lloyd’s Rep 538, 539 (argument of counsel). 104. In re Australian Direct Steam Navigation Co (1875) LR 20 Eq 325 (relying on the then English equivalent to Companies Act 1981 (Cth) s 368(3) rather than s 371(3)). This was followed in The Constitution [1965] 2 Lloyd’s Rep 538. Counsel for the holder of the lien conceded the point in In re Aro Co Ltd[ 1979] Ch 613. 105. Bankruptcy Act 1966 (Cth) s 58(3); Companies Act 1981 (Cth) s 371(2). 106. In re Aro Co Lid [1980] Ch 196, 205 (Brightman LJ). 107. ibid. The need for seeking leave is avoided in bankruptcy by the Bankruptcy Act 1966 (Cth) s 58(5) which

allows secured creditors to proceed as of right to realise their security. 108. Alternatives suggested are the time when the writ is issued ( The Monica S [1968] P 741, 772-3 (Brandon J); The Banco [1971] P 137, 161 (Cairns LJ); The Helene Roth [1980] 2 WLR 549, 553-4 (Sheen J)), or the time when the writ is served (The Banco [1971] P 137, 153 (Lord Denning MR who refers to service and

arrest), 158-9 (Megaw LJ); 77ie Berny [1979] QB 80, 98 (Brandon J following the majority in The Banco and without reference to his earlier decision in The Monica S )). See the discussion in the context of when a plaintiff proceeding in rem acquires the status of secured creditor with respect to the res in Re Aro Co Ltd [1979] Ch 613, on appeal [1980] Ch 196. For the view that the textual changes made in the Supreme Court Act 1981 (UK), s 21 have resolved the point in favour of the time when the writ is issued see Jack­ son (1982) 239. This is the right view in principle (subject to later amendments of the writ: see para 215).

cf The Zafiro [1960] P 1 where the precise time at which the winding up proceeding could be said to be commenced was also in issue. 109. The Zafiro [1960] P I \ In re Aro Co Lid [1980] Ch 196. 110. Benson Bros Shipbuilding Co (I960) Ltd v The Ship 'Miss Donna' [1978] 1 FC 379, 387 (Addy J), following

earlier decisions including an unreported Supreme Court decision of 1971. 111. In re Aro Co Ltd [1980] Ch 196 (CA) reversing [1979] Ch 613. The facts of this case are slightly unusual in that, as the ship was already under arrest, the creditor took out a caveat against release rather than under­ take a second arrest. As a matter of comity between the Chancery and Admiralty courts and to avoid a

multiplicity of arrests of the same ship the Court of Appeal was prepared to exercise its discretion and al­ low the creditor to continue in admiralty and so perfect the security. 112. The Constitution [1965] 2 Lloyd’s Rep 538, 542 (Hewson J).

214 / Civil Admiralty Jurisdiction

259. Priorities and Surrogate Ship Arrest. In chapter 10 it was recommended that an ac­ tion in rem be able to be brought against a surrogate ship in the case of most maritime claims. When a surrogate ship has been arrested in a situation in which an admiralty court has to determine priorities, the question arises whether the priority which the claim would have possessed on the wrongdoing ship carries over to the surrogate ship or whether the claim ranks differently on the surrogate ship. In England the relevant legisla­ tion does not expressly deal with the point. English courts have yet to decide it authorita­ tively but it appears that when the claim is pursued against a surrogate ship it enjoys the same priority as a statutory right in rem. In The Leoborg (No 2)1,3 one of the competing claims against the surrogate was for seamen’s wages earned aboard the wrongdoing ship. Although this would have ranked as a maritime lien on the wrongdoing ship it was ranked as a statutory right in rem against the surrogate. As Justice Hewson observed, the point had not been fully argued and it

raises matters which might have very far-reaching consequences. With these things in mind, I find it impossible for me in this motion to decide the point, which must expressly be left open for some future occasion in some other case."4

Counsel opposing the seaman’s claim for priority of a maritime lien on the surrogate ship suggested that there would be no injustice to the seaman because, to the extent that he failed to recover from the surrogate, he would still have a maritime lien against the wrongdoing ship.1 1 3 1 1 4 115 In addition it was suggested that the downgrading of the maritime lien to a statutory right in rem when brought against a surrogate ship was consistent with the policy of the English courts against the extension of maritime liens. The South Afric­ an legislation requires all claims in respect of the ‘associated ship’ to be met in the order stipulated. Only then are claims which have been transferred from the wrongdoing ship to be met. These follow inter se the same order of ranking.116 1 1 7 This produces a worse result from the point of view of a claimant proceeding against a surrogate ship than the pos­ ition tentatively reached in England. Under the latter the claimant would rank equally with, but not below, statutory rights in rem which had arisen in respect of the surrogate ship itself. However, it is possible that the English courts might, if they have to deal with the question directly, adopt as an equitable rule of thumb for the ranking inter se of claims based on statutory rights in rem a principle similar to that stated in the South Af­ rican legislation.

260. Two Main Issues. Two issues need to be resolved in deciding how the facility of surrogate ship arrest affects the ranking of claims. The first and most important is whether and to what extent a maritime claim is reduced in priority when pursued against a surrogate rather than the wrongdoing ship. The second is whether a maritime lien is ex­ tinguished if pursued against a surrogate ship and, because of the operation of the rules of ranking (or perhaps for other reasons), is either incompletely satisfied or not satisfied at all. To put matters in perspective, these questions only arise in the fairly rare cases in which a surrogate ship has been arrested and proves to be insolvent. It is also helpful to recall that, in matters of ranking of claims, the issue is one of justice between competing creditors, not between debtor and creditor. Ex hypothesi there will on any alternative be nothing left for the debtor after distribution."7 It was recommended in chapter 10 that

113. [1964] 1 Lloyd's Rep 380. 114. id, 384. 115. ibid. 116. Admiralty Jurisdiction Regulation Act 1983 (S Af) s 11(8). There are additional complications in that

some ‘transferred" claims are pursued against different parties, because of the ‘corporate veil' provision in the legislation: see Euromarine International o f Mauren v The Ship Berg 1984(4) SAfLR 647; Banque Par­ ibas v Fund o f Sale M V Emerald Transporter 1985(2) SAfLR 452. See para 140 n 157. 117. Bankers Trust International Ltd v Todd Shipyards Corp; The Halcyon Isle [1981] AC 221, 230-1 (Lord

Diplock).

Other Related Issues / 215

there be no right to arrest a surrogate ship on a claim arising out of a mortgage, in part because it would be inappropriate to allow someone who lent on the security of one ves­ sel to recover against another.118 1 1 9 The reasoning is relevant here. In addition the effect of this recommendation is to reduce the classes of claimants against the wrongdoing ship who can transfer their claims to a surrogate ship. Only maritime liens and statutory rights

in rem need to be considered.

261. Priority of Maritime Claim Transferred to Surrogate Ship. One possible solution would be to make no provision. On this basis Australian courts would be in a position to develop their own solution or, as is more likely, to follow the solution suggested in The Leoborg (No 2).U9 The advantage of any court-developed solution is that it will be based on the flexible equitable considerations already outlined. The corresponding disadvan­ tage is the uncertainty which will prevail until the courts articulate particular guidelines to cover the point. Two distinct questions are involved: the ranking of transferred claims

inter se and the ranking of transferred claims vis-a-vis claims which originated against the surrogate ship. But it is relevant to both questions that a claim pursued against a surro­ gate ship is by definition a statutory right of action in rem (even if, as against the wrong­ doing ship, that claim also gives rise to a maritime lien). There is no right to proceed against a surrogate ship on a maritime lien. Since the distinction between maritime lien and statutory right is basic to the legislation (including its provisions for surrogate ship arrest)120 1 2 1 1 2 2 , it seems desirable to adopt the same approach to priorities. Moreover some of the reasons, at least, why maritime liens are given priority over mortgages (for example, with salvage, that the res was thereby preserved) do not apply to surrogate ships. It seems undesirable to give priority to the salvor of ship A over the mortgagee of ship B in re­ spect of a fund constituted by the sale of ship B. The salvor has done nothing to preserve the ship in question: the salvage claim is able to be pursued against ship B only on the basis of the relevant person’s personal liability. It follows that transferred claims should

have the status of statutory rights in rem against the ship in question, and that maritime liens and mortgages over that ship should take priority over all transferred claims. On this basis it is likely that transferred claims will in principle be held to rank equally inter se 12‘, since they are all asserted as statutory rights in rem based on the liability of the rel­ evant person when the action was commenced. In other words, it is likely that this analy­ sis of surrogate ship claims will reinforce the conclusion reached in The Leoborg

(No 2) 122 as to the equal ranking inter se of transferred and ‘wrongdoing ship’ claims. The South African provision, which adopts the contrary view, was arguably necessary to deal with the problem of ‘group ship’ claims under the corporate veil provision123: claims with respect to which the shipowner is not the relevant person might well need to rank below claims against the shipowner or related to the particular ship.124 In the absence of a cor­

porate veil provision, the Australian legislation need not face this additional difficulty. Finally, from an Australian point of view the subordination of transferred claims to wrongdoing ship claims would adversely affect the usefulness of surrogate ship arrest, which would be pointless from a security aspect wherever the ship in question was (hav­

ing regard only to claims against it as a wrongdoing ship) insolvent. In the absence of a clear international consensus it is undesirable from an Australian point of view to de-118. See para 151,208. 119. [1964] 1 Lloyd's Rep 380.

120. See para 120, 126. 121. ie, apart from any special factors relevant in the particular case. 122. [1964] 1 Lloyd’s Rep 380. 123. See para 259 η 116.

124. This problem can arise in other contexts than 'group ships’, eg statutory liens. But these cases are excep­ tional and need not be specifically provided for. Another relevant factor is the equitable doctrine of mar­ shalling. On the use of this doctrine in admiralty in the 19th century see Thomas (1980) para 462. There appear to be no 20th century cases involving marshalling in admiralty.

216 / Civil Admiralty Jurisdiction

value surrogate ship arrest in this way.125 Consistently with the conclusion in para 258, the question of the ranking of (transferred or non-transferred) statutory rights in rem should be left to the courts. But it should be specifically provided that a transferred claim is not to be given a lower priority than a statutory right of action in rem against the ship in question merely because it is a transferred claim.

262. Effect on Maritime Liens. A consequential issue is whether a maritime lien on the wrongdoing ship is extinguished by a fruitless or only partially successful arrest of a sur­ rogate ship, thereby leaving only in personam remedies available with which to seek any unsatisfied balance. This question was discussed in para 212 in the context of multiple ar­ rest and rearrest. The conclusion reached was that the legislation should leave open the possibility of a second arrest in this case, leaving it for the courts to determine whether the lien survives in such circumstances. Consistently with that conclusion, the question of the priority of the lien on a second arrest should also be left open.

Arrest, Possessory Liens and Statutory Rights of Detention

263. Introduction. Arrest by the admiralty Marshal may interfere with the possession of the holder of a possessory lien or a right of detention exercised under a statute (such as that of a port authority to secure payment of dock charges). Conversely, exercise of a statutory right of detention may clash with the custody of the Marshal. English admiralty courts have evolved some rules to resolve these often difficult conflicts. Although osten­ sibly about possession, these conflicts are often in reality concerned with priority.

264. Arrest and Possessory Liens. For possessory liens [t]he evolved position has been to recognise the superior claim of the Admiralty Marshal sub­ ject to an effective judicial protection of the interest of the possessory lienee. It is the duty of the possessory lienee to surrender his possession of the res to the Admiralty Marshal where­

upon the court undertakes to protect both his interest and priority against the res or any fund in the hands of the court which represents the res. The possessory lienee is thereby in no way prejudiced by being compelled to part with possession.126 Although it is not altogether clear just what priority the possessory lien enjoys in admir­ alty vis-a-vis a claim supported by statutory right of action in rem, this general solution is satisfactory. There appears to be no Australian decision on the point. The proposed legis­ lation could give express power to local admiralty courts to adopt the solution developed in England. But the English courts have not required legislation to guide them on this point, and it is unnecessary to cover it in the proposed legislation.

265. Arrest and Statutory Rights of Detention. By contrast the English authorities on re­ solving conflicts between rights of detention and arrest are in conflict. In The Queen of the South, Justice Brandon reviewed these authorities and observed:

If the matter were free from authority, I should have thought in principle that the court should be able to deal with the statutory possessory lien of a dock or harbour authority in the same way as it deals with the common law possessory lien of a repairer and with the statutory right of sale of such an authority in the same way as it deals with the contractural or statutory right of sale of a mortgagee. That is to say, I should have thought that the court should have the power, in an action in rem against a ship, to sell her free of both rights, while transferring equivalent rights with equivalent priority to the proceeds of sale in court, and further should have the power to do this whether the dock or harbour authority consents or not. If the court does not have such power it is extremely inconvenient, for it means that, in any case where a

125. See para 93. This conclusion was strongly supported during the Commission’s consultations. 126. Thomas (1980) para 453 (footnotes omitted).

Other Related Issues / 217

dock or harbour authority has a right of detention or sale, the court cannot transfer the ship to a purchaser free of encumbrances...127

At present the better view is that the admiralty court has no power to accord the claim giving rise to the statutory right of detention first priority if transferred to a claim in ad­ miralty.128 If, as recommended in para 174, port and harbour dues and similar fees and levies are made a head of jurisdiction in the proposed legislation, a claim brought in reli­ ance on this head will rank below maritime liens and mortgages. Justice Brandon found

it unnecessary to resolve the conflict of authority. Instead, he referred to a different line of authority129 which showed that the court had the power to authorise the Marshal to pay the the amount claimed by the holder of the statutory right of sale when this was for the benefit of all interested parties. The Marshal can then include this amount in his ex­ penses and recoup them as first priority on the sale of the vessel.130

266. Reform. There are no reported Australian decisions on how statutory powers of de­ tention relate to the admiralty power to arrest and sell the vessel. One option would be to make no provision in the proposed legislation on the point. Courts would be free either to follow the solution of Justice Brandon or to resolve the conflicting authorities in the way which he favoured. Alternatively the legislation could provide for either solution.

Since the authorities are conflicting, and since the problem is quite likely to arise, es­ pecially where a ship is insolvent, express legislative provision should be made. Allowing the Marshal to buy off the claim may be risky in some situations. If the anticipated sale proceeds of the ship are not much more than the claim and costs of sale it may be impru­ dent of the Marshal to risk incurring a loss through buying it out. The inconvenient stand-off referred to by Justice Brandon would then result: the statutory claimant has the

right to sell the vessel but could not, in practice, do so because any purchaser would take it subject to admiralty claims; admiralty could sell free of all claims but its right to sell is subordinate to that of the statutory claimaint. For these reasons the best solution is to give the admiralty court power to override any statutory right of detention already exer­

cised, on condition that the claim underlying that right is given the appropriate priority, which should (unless the court otherwise orders) be first priority after the expenses of sale in admiralty. In the converse (and less usual) situation, where a ship is arrested before a statutory right of detention is exercised, the power of detention should be excluded. This

provision will have no application to rights of detention or seizure which exist for pur­ poses other than the recovery of civil claims within admiralty jurisdiction.131 For example it will not affect powers of forfeiture or seizure pursuant to customs, quarantine or similar legislation.

127. [1968] P 449, 462. For an example of the inconvenience caused if the court lacks this power to deal with statutory rights of detention see The Spermina (1923) 17 Lloyd's Rep 17, 52, 76, 109 which went before Hill J on 4 separate occasions before the competing canal authority and mortgagee were pursuaded to agree that the latter should pay off the former so as to enable the Marshal to sell the vessel free of the canal authority claim. 128. The Emitie Milton [1905] 2 KB 817 (CA): The Charger [1966] 3 All ER 117: McGuffie (1964 & 1975)

para 1573; cf The Spermina (1923) 17 Lloyd's Rep 17. 129. [1968] P 449, 464 referring to The Parita [1964] 1 Lloyd's Rep 199; The Westport (No 2) [1965] 2 All ER 447. 130. [1968] P 449, 464. 131. Although it has been held that the Commonwealth may not interfere with fiscal or governmental rights of

the States under the incidental power ( Victoria v Commonwealth (1956) 99 CLR 575), that case involved a very different situation. It is doubtful whether statutory rights of detention would fall within the protected class of ‘fiscal or governmental rights': even if they do, the incidental power in aid of federal judicial power in respect of a matter itself within federal jurisdiction is very strong, and is sufficient to validate the proposed provision.

218 / Civil Admiralty Jurisdiction

Pre-Judgment Interest

267. The Present Position. Admiralty rules governing the award of pre-judgment interest differ from those of the common law as modified by statute. The question therefore arises whether these separate rules should be preserved. By pre-judgment interest is meant a payment of simple interest132 in compensation for not having the use of the money ulti­ mately awarded between the time the cause of action arises and the date of judgment.

• At Common Law. At common law the courts lacked the power to award such inter­ est.133 This has been remedied by statute in England134 and in all Australian juris­ dictions135 except Tasmania.136 The High Court and the Federal Court also have this power.137 However the relevant statutes are not uniform.138 In Victoria and

South Australia a court is required to award interest unless good cause to the con­ trary is shown. In other jurisdictions the award of interest is entirely a matter of discretion. Interest may only be awarded from the date when the action com­ menced in South Australia and Victoria. In other jurisdictions the date the claim arose is the relevant date.139 The rate at which interest is to be awarded is dis­ cretionary in all jurisdictions except Victoria where it is linked to the long-term bond rate. There are other minor variations between jurisdictions as well as pro­ cedural differences in the way in which interest is claimed.140

• In Admiralty. The Admiralty Court was never bound by the common law rule pre­ venting the giving of pre-judgment interest. Although the wording of the English legislation which modified the common law rule is capable of including admiralty actions it is not regarded as having displaced earlier admiralty rules: a plaintiff in admiralty therefore has a choice whether to rely on the legislation or the admiralty rules.141 The assumption is that the latter will prevail if conflict arises.142 Because the wording of the relevant legislation in Australia is, on this point, similar to that in England the same situation presumably would be held to apply to admiralty in Australia.143 Although not bound by the common law rule it has been open to

132. It is accepted that there is no power to award compound interest in admiralty: The Garden City (No 2) [1984] 2 Lloyd’s Rep 37. 133. London, Chatham and Dover Railway Co v South Eastern Railway Co [1893] AC 429. 134. Law Reform (Miscellaneous Provisions) Act 1934 (UK) s 3; Administration of Justice Act 1982 (UK) s 15. 135. Supreme Court Act 1970 (NSW) s94; Common Law Practice Act 1867 (Qld) s 72; Supreme Court Act

1935 (SA) s 30c; Supreme Court Act 1958 (Vic) s 79A; Supreme Court Act 1935 (WA) s 32; Australian Capital Territory Supreme Court Act 1933 (Cth) s 53A; Supreme Court Act 1979 (NT) s 84. Many lower courts possess similar powers: see eg District Court Act 1973 (NSW) s83A ; Local and District Criminal Courts Act 1926 (SA) s 35g; County Court Act 1958 (Vic) s 50. 136. There has been a more limited reform in Tasmania. Under the Supreme Court Civil Procedure Act 1932

(Tas) s 34 pre-judgment interest may be recovered in actions on debt or for sums certain in some restric­ ted circumstances. 137. Judiciary Act 1903 (Cth) s77M A; Federal Court of Australia Act 1976 (Cth) s 5 1A (both inserted in 1984). For the previous position see Australian National Airlines Commission v Commonwealth (1975) 6

ALR 433, 435-6 (Mason J); State Bank o f New South Wales v Commonwealth Savings Bank o f Australia (1984) 53 ALR 625 (Gibbs CJ). 138. See generally H Luntz, Assessment o f Damages, 2nd edn, Butterworths, Sydney 1983, 493-5: B Cairns, Australian Civil Procedure. Law Book Co, Sydney, 1981, 460-3; Law Reform Commission of Western

Australia, Project No 70, Part I, Report on Pre-Judgment Interest. Perth, 1981, para 4.1-16. 139. It may be possible in South Australia to use the general discretion and award interest in respect of the period prior to commencement: Luntz (1983) 493. 140. Luntz (1983) 494; Cairns (1981) 462; WALRC 70, para 4.2-16. 141. The Aldora [1975] QB 748. See also The Norseman [1957] P 224, 230 (Lord Merriman P). 142. Law Commission of England and Wales, Report No 88, Law o f Contract: Report on Interest. London.

HMSO, 1978, para 135 implicitly accepts this. 143. The issue was referred to elliptically by Yeldham J in Burley v The Ship Texaco Southampton' [1981] 2 NSWLR 238, 249.

Other Related Issues / 219

question whether admiralty would allow pre-judgment interest in all types of claims. Almost all the cases concern collisions144, but it is clear that the rule applies more widely. Such interest was allowed for the first time in 1975 in a salvage case145, and a suggestion that interest can only be awarded in tort cases146 has been treated as erroneous.147 The view that the general rule rather than the admiralty

rule should apply to those matters over which admiralty only acquired jurisdiction after 1875 (when the separate Admiralty Court was abolished and admiralty juris­ diction given to the High Court) has also been rejected.148 The better view there­ fore is that pre-judgment simple interest can be awarded in all matters heard in ad­ miralty.149 It should be assumed that this will be the case under the proposed legis­ lation unless provision to the contrary is made.

• Award of Interest Discretionary. Awards of pre-judgment interest under the statu­ tory provisions are, as already noted, discretionary in varying degrees. In admir­ alty such interest was generally regarded until recently as being available as of right in collision cases150, though perhaps not in other cases.151 However in recent

English cases the emphasis has been on the general equitable nature of the power to award interest, and it appears that English courts have the same degree of dis­ cretion in collision cases in admiralty as in cases under the general legislation.152 The position in Australia is unclear but can probably be taken to reflect the shift

which has taken place in England. In admiralty there is a rule that interest must be included with the damages when a party makes a payment into court in order to avoid being at risk as to costs for having paid in an inadequate sum.153 Only re­ cently has a similar rule applied to non-admiralty claims.154 The position in the dif­

ferent Australian jurisdictions varies. But where there is a statutory regime govern­ ing the award of pre-judgment interest it seems that the position under statute is the same as in admiralty.155 This creates something of a guessing game for the de­ fendant in that, unlike the old admiralty rule where interest was as of right in col­

lision cases, it is necessary to include, in calculating the appropriate amount to pay in, an estimate of how the discretion to award interest will be exercised. But the position is no worse in admiralty than under the statutes. Compared to the pos­ ition under statute, admiralty in England has fairly precise rules on the period for

144. Tehno-Impex v Gebr Van Weelde Scheepvaartkantoor Z? I7 [1981] QB 648, 674 (Oliver LJ). 145. The Aldora [1975] QB 748. 146. The Medina Princess [ 1962] 2 Lloyd’s Rep 17, 21, 23 (Hewson J). Full argument on the point had not been heard and it is unclear whether any general statement of the law was intended. 147. Tehno-Impex v Gehr Van Weelde Scheepvaartkantoor B V [ 1981] QB 648, 665 (Lord Denning MR), 675-6

(Oliver LJ), 681 (Watkins LJ). 148. In Tehno-Impex, Oliver LJ, whose view this was, failed to convince his brethren. In President o f India v La Pintado Compania Navegacion SA [1985] AC 104, 121 Lord Brandon stated that the view of Oliver LJ ‘is the wrong one’. 149. [1981] QB 648, 665 (Lord Denning MR) (a judge exercising a admiralty jurisdiction was 'entitled to award

interest whenever it was equitable to do so’), 682 (Watkins LJ). 150. Law Commission 88, para 122. See eg Shaw Savill and Albion Co Ltd v Commonwealth (1953) 88 CLR 164, 166-7 (Dixon CJ) where this is assumed. 151. Law Commission 88, para 124. 152. id, para 125, citing The Berwickshire [1950] P 202, 208 and Jefford v Gee [1970] 2 QB 130. See also n 149. 153. The Norseman [1957] P 224. 154. See now Rules of the Supreme Court (UK) O 22 r 1(8), introduced in 1980. 155. Murphy v Murphy [1963] VR 610, 613 (Herring CJ); contrast Jefford v Gee [1970] 2 QB 130. The position

has been put beyond doubt in some jurisdictions by amendments to the relevant rules of the Supreme Court: NSW RSC 1970, Pt 22 r 2(3); Vic RSC 1985, 0 22 r 6A.

220 / Civil Admiralty Jurisdiction

which interest is payable in respect of collision actions.156 The fact that a different rule on interest applies in admiralty creates the further question whether the inter­ est rate to be applied is determined in a different way to that applied under statute. There was at one time a view in both England and Australia that this was the case, with the result that an unrealistically low rate prevailed.157 But in recent years courts sitting in admiralty have shown the same awareness of inflation as other courts and the rates applied in admiralty are calculated in the same realistic way as in other courts.158

268. Options for Reform. One option is to make no provision at all in the proposed leg­ islation. This would probably result in the preservation of the present admiralty rules. But it is conceivable that a court in a jurisdiction which has general legislation governing the award of pre-judgment interest would regard that legislation as extending to admir­ alty actions.159 This possibility could be avoided if the proposed legislation preserved the operation of the admiralty rules. A second option is to abolish the admiralty rules. This would result in a lack of uniformity, and a possible lack of provision for interest in some

courts. In England, where the lack of uniformity in the general law was not a factor, the Law Commission initially favoured abolishing the special admiralty rules.160 However, after consultation with interested parties, the Law Commission reversed its position and recommended the retention of the special admiralty rules.161 There were several reasons for this change of view. First, it was persuaded that modern admiralty courts did not award interest as of right even in collision cases. Rather, they had the same discretion as courts acting under the general legislation. Secondly, it was convinced that, in compari­ son with the ‘single rough and ready rule’ which applies outside admiralty, the admiralty rules ‘have been refined over the centuries and in the small area in which they apply they have been found to work with certainty and fairness’.162 While there is some variation in the degree of guidance given by the statutes in Australia it would still be fair generally to characterise the guidance given as ‘rough and ready’. Third, the rule on whether payment into court should include an amount in respect of interest differed in England between admiralty and non-admiralty cases. The Law Commission favoured the admiralty rule that interest should be included and suggested that the general rule be altered to conform to the admiralty rules.163 As noted in para 267, the general rule has been interpreted to this effect in those Australian jurisdictions where the operation of the general rule has had to be considered. It seems reasonable to suppose that other Australian jurisdictions will decide or legislate to similar effect. Hence on this point there is no real divergence in Australia between the admiralty and the general rules. The final consideration which in­ fluenced the Law Commission was the possible reduction in the flow of litigation brought to London if the special admiralty rules were abolished.

156. Law Commission of England and Wales, Working Paper No 66, Interest. London, 1976, para 29 (foot­ notes omitted): it has been held, for example, that on the sinking of an unladen vessel the plaintiff is entitled to in­ terest from the date of sinking; on the damaging of a vessel from the date of payment for the re­

pairs; and on death or personal injury at sea from the date of the registrar's report to the trial judge. 157. The Theems [1938] P 197, followed reluctantly in Asiatic Steam Navigation Co Ltd v Commonwealth (1956) 96 CLR 397. 158. See eg The Funabashi [1972] 1 WLR 666; Gaggin v Moss [1983] 2 Qd R 486. 159. The WALRC Report (above n 138) is silent on this point. The assumption appears to have been that the

admiralty rules would survive their proposed general reform (which has now been implemented: Supreme Court Act 1935 (WA) s 32). 160. Law Commission, WP 66, para 98-100, 107. The admiralty rules would have continued to be available as a guide to the exercise of discretion in selecting the date from which the interest should be awarded. 161. Law Commission 88, para 123, 234. 162. id, para 131. 163. id, para 132.

Other Related Issues / 221

The rules applied in admiralty cases ... are well-known internationally and generally accept­ able; this country is often chosen as the venue for legal proceedings rather than other coun­ tries where such proceedings might be brought. We were warned by several persons and or­ ganisations who sent comments and who are closely involved with admiralty litigation that

changes in the existing rules and, in particular, changes that replaced comparative certainty of the existing rules with the different and less well-established guidelines that have been devel­ oped under the 1934 Act would make our courts less attractive to litigants from other coun­ tries.164

The force of this argument is much reduced in Australia because it is not, or not yet, a centre of maritime arbitration and litigation.165 1 6 6 But there is no reason to adopt a rule which would discourage the flow of litigation to Australia unless some compensating fac­ tor can be identified. The main disadvantage of preserving the admiralty rules in Aus­ tralia is their inaccessibility. There is so far no authoritative Australian judicial statement of the rule nor any local textbook. English sources have to be relied upon, including 19th century case law. If one of the aims of the proposed reforms is to make admiralty law more accessible it is not clear that preserving separate and relatively difficult to locate ad­ miralty rules is appropriate. A third option is to restate the admiralty rules in the pro­ posed legislation. This would solve the accessibility problem though it would still leave admiralty in a different position to the general law. But codification would endanger one of the reasons for preserving the separate rules, harmony with the admiralty rules applied overseas. Those rules are subject to evolution and refinement, and a codification could

fall out of step.

269. Need for a Head of Jurisdiction Covering Interest. Before coming to any conclusion on this point, it is helpful to refer to a related problem, that of the need for a specific head of jurisdiction covering interest. If The Medina Princess 166 was correctly decided (and Lord Brandon has stated that it was167), there is a need for a head of admiralty juris­ diction under which a claim for interest can be heard independently of the underlying claim. In that case seamen’s wages fell due in 1958, a writ was issued in 1959, the defend­

ant paid the amounts due after pleadings had closed in 1961. When the matter was heard in 1962 the only claim remaining was for interest in respect of the period 1958-1961. The claim was found to be outside the jurisdiction of the court. The relevant general legisla­ tion referred to interest which ‘shall be included in the sum for which judgment is given’.168 As no judgment had been given there was nothing in which to include the inter­

est. The alternative possible sources of jurisdiction, inherent or statutory admiralty juris­ diction, were not considered in detail. But it might be argued that a claim for interest, where the underlying wage claim has been settled, is not a claim for ‘wages’. It was rec­ ommended in para 193 that the inherent jurisdiction of admiralty not be preserved. In any event it appears that the inherent jurisdiction of the court only allows pre-judgment interest to be awarded, in the same way as the general legislation, as part of a judg­ ment.169

164. id, para 134. 165. In this area as in many others it is London arbitrators rather than the Admiralty Court who apparently have developed the rules: see eg The Aldora [1975] QB 748, 750 (Brandon J). 166. [1962] 2 Lloyd’s Rep 17.

167. President o f India v La Pintada Compania Navegacion SA [1985] AC 104, 121.The other members of the House of Lords agreed with Lord Brandon's speech. 168. Law Reform (Miscellaneous Provisions) Act (UK) 1934. The corresponding legislation in NSW, Qld, SA and WA uses the same formula (see para 267 n 135). See n 169 on the 1982 amendment to the English leg­

islation.

169. President o f India v La Pintada Compania Navegacion S4 [1985] AC 104, 120-1 (Lord Brandon). This case was decided on the pre-1982 law. See now s 35A(l)(a) inserted in the Supreme Court Act 1981 (UK) in 1982. This allows the court in admiralty actions or otherwise to award simple interest for all or any part of the period between the date when the cause of action arose and the date of payment of the claim.

222 / Civil Admiralty Jurisdiction

270. Conclusions on Pre-Judgment Interest. In the absence of any countervailing argu­ ments, the reasons given by the English Law Commission for retaining the admiralty rules for pre-judgment interest suggest that a similar course should be adopted in Aus­ tralia.170 1 7 1 This would also avoid any problems created by gaps in the general remedial

powers of courts, and associated forum shopping. No specific provision needs to be made to this effect, but it is desirable to have a separate head of jurisdiction governing interest claims to avoid situations such as in The Medina Princess m, where a defendant deprives the plaintiff of the money due until just before judgment and thus avoids paying interest

on that money.

170. cf Admiralty Jurisdiction Regulation Act 1983 (S AΓ) s l(l)(ii)(y). Separate provision should be made for interest claims in respect of proprietary and general maritime claims, to avoid surrogate ship arrest with respect to the former: cf para 208. 171. [1962] 2 Lloyd's Rep 17. cf Berry v Stinson (1973) 5 SASR 225, 228 (Bray CJ).

Relationship o f Proposed Legislation to Other Laws / 223

13. Relationship of Proposed Legislation to Other Laws

Imperial Legislation

271. Repeal o f Imperial Legislation. The proposed legislation should repeal the Colonial Courts of Admiralty Act 1890 (UK) insofar as it applies to Australia. There are other English Acts which have, or which may have, some relevance to admiralty jurisdiction in Australia. Reference has already been made to the statutes of 1389 and 1391', to 2 Hen

IV c 111 2, and to admiralty jurisdiction provisions of the Merchant Shipping Act 1894 (UK) and its associated legislation.3 Other statutes, probably no longer (and possibly never) in force here but not yet formally repealed in all parts of Australia, are 17 Edward

II, c 13 (1324) dealing with wreck4 and 2 Wm & M sess 2, c 2 (1690) dealing with the ap­ pointment of admiralty commissioners.5 The proposed legislation should repeal all Eng­ lish statutory provisions that affect, or may affect, admiralty jurisdiction in Australia.6 One method of doing this would be to repeal by explicit reference to each of the relevant Acts or provisions. Another method would be simply to provide that all admiralty jurisdictional provisions in English legislation are repealed. This latter method is briefer

and would ensure that any relevant provisions which had inadvertently been overlooked would nonetheless be repealed. However, this approach would leave it to those interpret­ ing the legislation to decide if a particular admiralty provision could be properly charac­ terised as ‘jurisdictional’. The uncertainty, if any, which might result is most likely to arise with respect to the Merchant Shipping Act 1894 (UK). It would be beyond the scope of this Reference to recommend the repeal of the 1894 Act entirely insofar as it effects Australia. Yet the distinction between admiralty and maritime jurisdiction on the one hand and substantive maritime law on the other is not always easy to draw.7 Where a sin­ gle provision combines substantive and jurisdictional elements it may be particularly dif­ ficult to decide what has and has not been repealed. Therefore repeal should be by explic­ it reference rather than by blanket provision.

1. See para 9, 148. 2. See para 9.

3. See para 54, 155, 163, 177. 4. See New South Wales Law Reform Commission Report 4, Application o f Imperial Acts. (NSWLRC 4) Sydney, Government Printer, 1967, 74-5 for a brief description of this statute and a recommendation that it be repealed as being spent. 5. id, 100.

6. For the Act 4 & 5 Anne c 3 s 17-19 providing time limits for the recovery of seamen’s wages see para 249; cf South Australian Law Reform Committee, Report No 55, Inherited Imperial Statute Law on Practice and Procedure. (SALRC 55) Adelaide, Government Printer, 1980, 21. Since the proposed legislation does not make comprehensive provision for time limits, it is not proposed to repeal these provisions. 7. See para 17, 80, 116-7.

224 / Civil Admiralty Jurisdiction

State and Territory Legislation

272. Introduction. Reference has already been made to State and Territory legislation which affects matters with which the proposed legislation will deal. In this section some general observations are made on the appropriate relationship between the two kinds of legislation.

273. Curing Possible Invalidity. Legislation and rules of court affecting admiralty juris­ diction in some States are valid if s 6 of the Statute of Westminster 1931 (UK) removed the need for State legislation and rules to comply with the manner and form requirements of s 4 of the Colonial Courts of Admiralty Act 1890 (UK).8 Consideration was given to curing any possible invalidity arising from non-compliance with s 4. However there are difficulties with federal legislation seeking to validate State legislation.9 Moreover the States can now, with the enactment of the Australia Act 1986 (Cth) and its United King­ dom counterpart, readily solve any problem of this kind themselves. Accordingly no rec­ ommendation for federal action is called for.

274. Adding to Admiralty Jurisdiction. The proposed legislation will, as indicated in chapter 9, contain a list of heads of subject matter which will fall within admiralty juris­ diction. It was not proposed that there should be included any express power which would allow State or Territory legislation to add to this list. Without such a power, any attempt by other than federal legislation to vary the list would fail. In this sense the pro­ posed legislation will cover the field of civil arrest in admiralty. But it will not attempt to cover the field of substantive admiralty and maritime law. It will be open to a State or Territory acting within its legislative power to alter, for example, the substance of the law of contract or tort as it affects shipping, the law of salvage, or even the law of maritime liens so as to create new liens or abolish existing liens. Because of the way the proposed legislation will operate to pick up ‘maritime liens’ without attempting to define exhaus­ tively what liens exist10, any State or Territory legislation on the substance of maritime liens will indirectly affect the scope of admiralty jurisdiction under the proposed legisla­ tion.11 Apart from maritime liens it would be a matter of statutory interpretation whether any new cause of action so created came within any head of jurisdiction defined in the proposed legislation. If, for example, State or Territory legislation extends the ambit of salvage law, it will be a question of interpretation whether claims arising under the exten­ sion are within admiralty jurisdiction under the head, ‘claims relating to salvage’.12 The point is mentioned simply to make clear the way in which the proposed legislation will operate. Nothing can or should be done in the proposed legislation to produce any dif­ ferent result. This limited and indirect ability of non-federal legislation to affect the sub­ ject matter within federal admiralty jurisdiction is simply a consequence of the fact that

control over the substance of maritime law is at present shared between the federal and State legislatures.

S. See para 27. 9. cf University o f Wollongong v Metwally ( 1984) 56 ALR 1. 10. See para 122. 11. This result might be thought anomalous: the States will retain the capacity to affect admiralty jurisdiction

through the creation of new liens, but not through the creation of statutory rights of action in rem. al­ though the latter are, from an admiralty point of view, less powerful than the former. The distinction is however the result of the distinction between substance and procedure probably required by the Constitu­ tion s 76(iii), and of the lack of any general international agreement on the proper scope of maritime liens. The States have in fact shown no disposition to expand admiralty jurisdiction by the creation of new liens, and if they did do so in ways which affected the balance of the proposed legislation or cut across any future international consensus as to the proper scope of maritime liens, the Commonwealth possesses sufficient power to deal with the problem. 12. See para 155-7.

Relationship o f Proposed Legislation to Other Laws / 225

275. Other Forms of Detention o f Ships. The 1952 Arrest Convention provides an exhaustive code of claims upon which and the manner in which ships may be arrested. Article 2 provides:

A ship flying the flag of one of the Contracting States may be arrested in the jurisdiction of any of the Contracting States in respect of a maritime claim, but in respect of no other claim; but nothing in this Convention shall be deemed to extend or restrict any right or powers vest­ ed in any Governments or their Departments, Public Authorities, or Dock or Harbour Autho­

rities under their existing domestic laws or regulations to arrest, detain, or otherwise prevent the sailing of vessels within their jurisdiction.13 The question is whether the definition of maritime claims giving rise to a statutory right of action in rem in the proposed legislation (which, like art 2, is exhaustive) allows suffici­ ent scope for analogous or parallel State remedies involving the arrest or detention of ships. It is useful to distinguish four ways in which a ship may be detained. The first is ar­ rest in the admiralty sense. The second is detention pursuant to a judgment given by a court; such detention is part of the process of execution (or, in a criminal proceeding, the imposition of a penalty14) and may occur as a consequence of a judgment of a court other than an admiralty court. The third is a possessory lien (including any statutory power of a port authority to detain a ship until port charges are paid15) which is distinct from a maritime lien or statutory lien in admiralty. The fourth is what might be described as de­ tention by the State in anticipation of a breach of laws or regulations to which penalties attach. A typical example would be the power to prevent a ship in breach of safety16 or oil pollution prevention measures from sailing. There is no real difficulty distinguishing admiralty arrest from these other types of detention. However the Navigation Act 1912 (Cth) s 383 illustrates a further type of detention which is perhaps less easy to distinguish. This section gives a very broad power to State and Territory Supreme Courts, exercisable ‘summarily’, to detain a foreign ship found in Australia that has occasioned ‘injury to property belonging to the Queen, the Commonwealth, a State, a Territory, a Common­ wealth country other than Australia, a British subject or a citizen of a prescribed coun­ try’. The owner or master of the vessel can either make satisfaction for the injury or give security for the claim approved by the court. Giving such security constitutes conclusive evidence of submission to the jurisdiction of the court. The choice is whether to leave the provision as it is17 1 8 , to leave it intact in substance but to alter the courts referred to from State and Territory Supreme Courts to ‘courts exercising admiralty jurisdiction in rem''s, or to repeal the provision entirely.19 Total repeal of s 383 is appropriate.20 The arrest pro-13. See F Berlingieri, ‘The 1952 Brussels Convention on the Arrest of Ships', CMI Doc Arrest -2 /X I-8 3 , De­

cember 1982, 2-3 for discussion. 14. See the discussion of forfeiture in para 177. The Navigation Act 1912 (Cth) s 399 gives any court a gener­ al power in addition to its ordinary powers to order distress and sale of the ship to meet sums ordered by the court to be paid by the master or owner of the ship. 15. See para 263-6 on the relationship between this power of detention and admiralty. 16. See eg Western Australian Marine Act 1982 (WA) s 57(1) (search power), 61(1) (unsafe ships), 63(1) (order

ship to return to port). 17. This is what was done in New Zealand. The Shipping and Seamen Act 1952 (NZ) s 488 continues unaf­ fected by the Admiralty Act 1973 (NZ) and gives jurisdiction to the High Court. See para 175 for the im­ plied amendment of s 383 by the Protection of the Sea (Civil Liability) Act 1981 (Cth).

18. cf Canada where the provision equivalent to s 383, Canada Shipping Act 1934 (Can) s 685 as revised by the Federal Court Act 1970 (Can) Sch 11(5), gives exclusive jurisdiction to the Admiralty Court which is part of the Federal Court.

19. This was done in England by the Administration of Justice Act 1956 (UK) s 7(1), repealing Merchant Shipping Act 1894 (UK) s 686. 20. cf Commission of Inquiry into the Maritime Industry (Chairman, MM Summers), Fourth Report. Austral­ ian Maritime Legislation. AG PS, Canberra, 1977, 192 where, without commenting on the larger issue of

whether s 383 should be repealed, it is suggested ‘that Australia should not now take action to detain a foreign ship which has caused injury to property belonging to a Commonwealth country other than Aus­ tralia or belonging to a person other than an Australian citizen'.

226 / Civil Admiralty Jurisdiction

visions in the proposed legislation cover the same ground, in that they will give a plaintiff proceeding in admiralty adequate power to detain a ship to provide security. If a speedy ex parte means of arrest is required, the appropriate place for it is the rules of court for the courts exercising admiralty jurisdiction under the proposed legislation. The question remains whether the proposed legislation should seek to prevent legislation by the States or Territories which, like s 383, aims at providing a power of detention to assist plaintiffs. It was suggested in para 246 that the detention of ships through the use of Mareva in­ junctions should be permitted to continue as an additional or alternative remedy to ad­

miralty arrest. A similar laissez-faire view should be taken of whatever variations on s 383 lie within the constitutional powers of the States and Territories. Partly this is because there seems little likelihood that such legislation will be enacted. Partly it is because it would be difficult for the proposed legislation, without becoming over-intrusive in areas of legitimate State and Territory concern, to exclude such parallel remedies altogether.

No further recommendation is called for.

Commonwealth Legislation

276. Navigation Act 1912 (Cth). Most of the provisions in Commonwealth legislation which refer to admiralty jurisdiction have been already referred to in their specific con­ texts. A few matters remain to be discussed.

• Removal of Master (s 385). Section 385 of the Navigation Act 1912 (Cth) provides that ‘any Court having Admiralty jurisdiction may remove the master of any ship within the jurisdiction of the court if it thinks it necessary to do so’. Any owner, owner’s agent, officer of the ship, or one-third or more of the crew may apply to the court for removal. Provision is also made in the section for appointment of a

new master by the court. The Summers Report observed that ‘[njowadays it is diffi­ cult to imagine any circumstances in which the removal of a master by a Court would be necessary or desirable’.21 In the light of this, s 385 should be repealed and no equivalent provision needs to be included in the proposed legislation. The equivalent provision in the Merchant Shipping Act 1894 (UK), s 472, should also be repealed as it applies to Australia.22

• Defence o f Common Employment (s 59A). Section 59A of the Act abolishes the de­ fence of common employment. It appears to apply only to actions in respect of in­ jury or damage suffered by seamen aboard ships registered in Australia, ships en­ gaged in the Australian coasting trade and ships the majority of the crew of which

are resident in Australia and are operated by an Australian resident or a person or company that has its principal place of business in Australia.23 The question is whether this is adequate or whether s 59A should be extended to cover all actions brought in admiralty.24 The State legislation which abolishes the common law de­ fence of common employment generally has been held not to apply extraterritori­

al. ibid. 22. s 472 was repealed in the United Kingdom by the Merchant Shipping Act 1970 (UK) Sch 5 and not re­ placed by any similar provision. 23. Navigation Act 1912 (Cth) s 10. This section applies ‘except so far as the contrary intention appears’.

There is nothing in s 59A to indicate any such intention. 24. cf s 262, applying to all admiralty actions the survival of actions legislation.

Relationship o f Proposed Legislation to Other Laws / 227

ally.25 Thus where, under private international law rules, local tort law is the rel­ evant law and the ship in question is one to which s 59A does not apply, the de­ fence of common employment would appear to be still available. It is not clear

that this happens sufficiently often to be of concern because the private interna­ tional law rules would, in the view of most writers, apply the law of the flag to torts internal to a ship.26 On the other hand where the tort arises from a collision be­ tween ships of differing flags, it would appear that the lex fori would apply.27 Most actions in which the defence of common employment would be relevant might be expected to arise from actions internal to the ship. But, on the basis that there may be some situations in which the defence would be available and that there would

not appear to be any disadvantages in extending the ambit of s 59A, it should cover all actions in admiralty.

• Curing Possible Invalidity. Reference has already been made to the long-standing question whether parts of the Navigation Act, enacted before the Statute of West­ minster Adoption Act 1942 (Cth) became effective, are valid.28 It would appear that all concerned operate on the basis that no part of the Navigation Act is invalid due to repugnancy to, or failure to conform to the manner and form requirements of,

overriding Imperial legislation. However it is by no means clear that this is so, and it is desirable to avoid any doubt. The question is whether the Act should be vali­ dated with retrospective effect, or only with prospective effect.29 Since settled ex­ pectations are, it appears, based upon the validity of that Act, there should be a complete retrospective validation.

277. Seamen’s Compensation Act 1911 (Cth). This Act makes detailed provision for compensation to seamen for injuries arising in the course of their employment. The Act applies to seamen on Australian registered ships, to seamen employed in Australia on foreign registered ships engaged under licence in inter-State trade, and to seamen en­ gaged in Australia to deliver a ship to or from Australia. A right of detention is given by s 3(1) where the owner of the relevant ship does not reside in Australia. A judge of a State or Territory Supreme Court may order the ship detained until the compensation has been paid or security for the amount given. This provision will rarely be relevant because the major class of ships to which it applies, Australian registered ships, will normally be owned by a local resident.30 But the right of detention cannot be abolished without loss because some of the rights to compensation under the Act would not be covered by any

proposed head of admiralty jurisdiction.31 One option is simply to allow the power of de­ tention to continue to co-exist with admiralty arrest. Another would be to transfer the power to order detention to any court having power to arrest in rem under the proposed legislation. A third option would be to convert the right of detention into a right of arrest

by creating a statutory right of action in rem for all claims arising under the 1911 Act for which the detention power is presently available. However the overlap between the 1911

25. Cotter v Huddart Parker Ltd (1942) 42 SR (NSW) 33: Huddart Parker Ltd v Cotter (1943) 66 CLR 624. Under provisions such as the Acts Interpretation Act 1958 (Vic) s 40 and the Application of Laws (Coast­ al Sea) Act 1980 (NSW) s 4, State legislation abolishing common employment would now appear to apply to causes of action arising within the coastal sea (ie within the 3-mile limit): El Sykes & MC Pryles, Aus­ tralian Private International Law. Law Book Co, Sydney, 1979, 341-2. 26. id, 341. 27. ibid. 28. See para 56. 29. The Navigation Act 1965 (Cth) s 57 provides a model. This validated regulations made under the princi­

pal Act.

30. Shipping Registration Act 1981 (Cth) s 12-14. 31. eg Seamen's Compensation Act 1911 (Cth) s 5AA (injuries caused while travelling to or from employ­ ment).

228 / Civil Admiralty Jurisdiction

Act and admiralty has existed for a long time without apparently causing any difficulty. No change is recommended.

Law Maritime and International Law and Comity

278. Need for Express Provision? It was noted in chapter 4 that s 2(2) of the Colonial Courts of Admiralty Act 1890 (UK) requires courts exercising jurisdiction under the Act to have the same regard as the High Court in England to ‘international law and the com­ ity of nations’. The question is whether the proposed legislation should contain any pro­ vision directing Australian courts exercising admiralty jurisdiction to have regard to international trends and requirements and the decisions of overseas maritime tribunals. On one view such a provision is unnecessary. There is no body of general maritime law which could be picked up by such a provision.32 Nor does it seem desirable that Austral­ ian admiralty courts be given the power to import rules of public international law into Australian law in any special way (that is, in circumstances where they would not do so at common law).33 Where there are specific requirements of international law (or comity) which local courts exercising admiralty jurisdiction should have regard to, these should be stated in legislation.34 Australian judges need no specific mandate in order to give due regard to international trends, and to the decisions of admiralty judges in overseas juris­ dictions. Legislation in comparable overseas jurisdictions does not contain any equiva­ lent provision, and there seems no sufficient need for provision in the proposed Austral­ ian legislation.

32. The Tojo Maru [1972] AC 242, 290 (Lord Diplock); Bankers Trust International Ltd v > Todd Shipyard Corp; The Halcyon Isle [1981] AC 221, 232, 238 (Lords Diplock, Elwyn-Jones and Lane): but cf id, 243 (Lords Salmon and Scarman, dissenting) who, at least on the point at issue, recognition of foreign maritime liens, were more receptive to ‘the concept of a universal law of the sea’ as a guide to resolving uncertain­ ties and to judicial development of the law. However even Lords Salmon and Scarman did not suggest that there was any precise body of rules which could be picked up by a phrase such as 'law maritime'. 33. cf Trendtex Trading Corporation v Central Bank o f Nigeria [1977] QB 529 on the common law rules. 34. See eg para 62, 200 (actions in rem against foreign state-owned ships). The need to notify the consul of

the flag state when certain types of actions in rem are brought against foreign ships is discussed in para 298.

Part IV

CIVIL ADMIRALTY JURISDICTION: PROCEDURE AND RULES

14. The Form and Content of Admiralty Rules

279. Introduction. The Commission’s Terms of Reference specifically require it to formulate draft Rules of Court for possible application by courts upon which Admiralty juris­ diction may be conferred by the Admiralty Act as recommended by the Commission.

Rules, drafted in response to this requirement, are set out in Appendix A.' A number of key issues concerning the form and content of the proposed Rules require discussion, in particular: • the basic issues of the need for uniform rules and their scope;

• the rule-making authority; • the scope of judicial and administrative authority under the Rules (in particular the powers of Registrars and the use of nautical assessors); • specific procedural issues arising under the Rules (including mode of trial, use of

preliminary acts and notice to consuls); and • provision for costs or damages for frivolous or vexatious arrests.

Uniform Admiralty Rules

280. The Rules in Force at Present. The Colonial Courts of Admiralty Act 1890 (UK) s 7 provides that the Vice Admiralty Rules 1883 (UK) shall apply in default of any local rules. The 1890 Act permits local rule-making by whatever method rules are made for the ordinary business of the court which has admiralty jurisdiction under the Act. Before the entry into force of the Statute of Westminster Adoption Act 1942 (Cth), locally made rules were required by the 1890 Act to be approved by the Queen in Council. The Statute of Westminster 1931 (UK) s 6 removed ‘in any Dominion’ the need to seek such ap­ proval. The view that has been acted upon is that this allows State as well as Common­ wealth rule-making without the need to seek approval.1 2 While the Territories still rely on the 1883 Rules, all the States have made rules for the exercise of the admiralty jurisdic­ tion conferred by the 1890 Act upon their Supreme Courts. In content these rules are broadly similar, being to a greater or lesser extent modernised versions of the 1883 Vice Admiralty Rules. In most States the admiralty rules are an Order or Chapter of the Su­ preme Court Rules. For the Queensland Supreme Court and the High Court, provisions

relating to admiralty actions have been integrated into the relevant Orders of the general

1. The Commission has been much assisted in the preparation of the draft Rules by a ‘Rules Sub-committee’ consisting of Mr A Scotford (Ebsworth & Ebsworth), Ms Morelia Calder (Dawson, Waldron) and Mr Bruce Brown, Secretary, NSW Supreme Court Rules Committee. 2. Though on a different point, the decision of the High Court in Kirmani v Captain Cook Cruises Ply Ltd

(1985) 58 ALR 29 as to the meaning of s 2(2) of the Statute of Westminster 1931 (UK) supports this as­ sumption.

232 / Civil Admiralty Jurisdiction

rules, service in rem, for example, being dealt with in the Order covering service.3 Where the existing State rules apply only to proceedings instituted under the Colonial Courts of Admiralty Act 18904, or where the Court continues to rely on the Vice Admiralty Rules 1883 (UK)5, the repeal of the 1890 Act will mean that the Rules either lapse or cease to be relevant to the reformed admiralty jurisdiction. On the other hand in two States the Ad­ miralty Rules apply to all cases where the Court is exercising its admiralty jurisdiction6, and these rules could accordingly remain relevant to any new federal admiralty jurisdic­ tion vested in those Courts, so far as they were capable of applying and were not incon­ sistent with the federal Act or Rules. Similarly the other State and Territory Supreme Courts could make new admiralty rules to apply in such cases.

281. The Need for Uniform Rules. An initial question therefore is whether there should be a single uniform set of Admiralty Rules governing actions under the proposed legisla­ tion, or whether rules should be left to each Court to devise. The Terms of Reference themselves imply that there will be uniform rules, and this was also the view of the Zell- ing Committee.7 The arguments for uniform rules are strong. It is unsatisfactory to have federal legislation dependent on the work of separate rules committees for its full and ef­ fective implementation. The legislation could not come into force until all the courts upon which jurisdiction was conferred had made new rules or amended existing rules.

Similar problems would arise if the legislation were subsequently amended. In addition local autonomy, if it is to be meaningful, would result in variations in an area in which there is much to be said for uniformity, and where the interaction between substance and procedure is exceptionally close. There would also be considerable duplication of draft­ ing effort among the various rules committees. In discussions on the Reference there has been general support for federal Rules, for these and other reasons.8 282. The Rule Making Authority. Given that the Rules are to operate throughout Aus­ tralia in relation to proceedings commenced under the proposed legislation in both the Federal Court and State courts, it is inappropriate to have the Rules made and amended by any one court. The obvious solution is to have the Rules made, and amended from time to time, by the Governor-General, as is the case with the Bankruptcy Rules 1966.9 The Bankruptcy Rules provide a fairly close analogy, since they were intended to be ap­ plied both by the Federal Court (as successor to the former Federal Court of Bankruptcy) and by the Supreme Courts of the States and the Northern Territory. It is understood that the Bankruptcy Rules have worked well and that the provision for them to be made and amended by the Governor-General has been satisfactory. Accordingly, a similar pro­ vision is recommended for the Admiralty Rules. That leaves the question of who advises on the working and amendment of the Rules. The simplest solution would be for the

3. See High Court Rules 0 5 r 8-9, O 50 r 10-12, 0 53, 0 62 r 10-12; Queensland Admiralty Rules 1894 (printed in Queensland Supreme Court Practice, KW Ryan, HA Weld & WC Lee (ed), Butterworths, Sydney, 1984, vol 2, 20,023); New South Wales Admiralty Rules 1952; Victorian Admiralty Rules 1975; Tasmanian Rules of the Supreme Court 1965, Part IV: South Australian Supreme Court Rules 0 39; Western Australian Supreme Court Rules 1971, O 74. 4. As is the case in NSW, Qld, SA and WA: NSW Ad Rules 1952, r 3; Qld RSC, Ο 1 r l ,O 6 0 r 1A; SASCR,

O 39 r 1(2); WA RSC 1971, O 74 r 1(2). 5. As with the Territories. 6. Vic Ad Rules 1975, r 2(1); Tas RSC 1965, Pt IV r 1(1), 2(1). 7. Joint Committee of the Law Council of Australia and the Maritime Law Association of Australia and

New Zealand, Admiralty Jurisdiction in Australia. 1982, 46-7. although that Committee did not discuss the content of such Rules or attempt to formulate them. 8. See, among many other expressions of support for this conclusion, WE Paterson QC, Submission 62 (18 November 1985) 13; Australian Mining Industry Council, Submission 86 (13 May 1986) 5-6. Only one

contrary view was expressed: SA Crown Solicitor, Submission 77(5 February 1986) 2. 9. See Bankruptcy Act 1966 (Cth) s 315. This was also the case with the rules made under the Matrimonial Causes Act 1959 (Cth) s 127, and is now the case with the regulations made under the Family Law Act 1975 (Cth) s 123.

The Form and Content o f Admiralty Rules / 233

Commonwealth Attorney-General to do so after informal consultation with judges of the various courts and other persons experienced in the operation of the Act and Rules.10 The alternative would be to establish a more formal body such as a rules committee to advise on the exercise of rule-making powers. The latter would have the advantage of ensuring

continuing supervision, a matter which will be of special importance during the ‘settling- in’ period for the legislation and Rules. There would be a specific body constituted with a direct interest in dealing with problems as they arise. The less formal approach would de­ pend upon the Commonwealth maintaining a close interest over an extended period. It might also result in delays if there is no set pattern of consultation or if, for example, the relevant Department decides to accumulate amendments before submitting them to

Executive Council.11 On balance the more formal approach is preferable, especially given the close relationship between procedure and substance in admiralty and the increased significance of procedural questions that flows from this. The legislation should expressly provide for the establishment of a rules committee.12 1 3 In light of the wide range of inter­

ests that could claim representation on such a committee and the need (in the interests of economy and efficiency) for the body to be reasonably small, the composition of the com­ mittee should not be fixed in the Act. It may be, for example, that some form of rotation­ al system of representation will be needed. The composition of the committee should not be specified in the legislation but should be left to the discretion of the Commonwealth

Attorney-General. However it should be provided that the membership of the Committee shall include at least one Supreme Court judge and at least one Federal Court judge.

283. The Scope of Uniform Rules. The remaining preliminary issue is how comprehen­ sive the coverage of the Rules should be. A full set of rules governing all aspects of ac­ tions brought in the admiralty jurisdiction conferred under the proposed legislation would have certain advantages. It would avoid duplication of drafting effort. It would

also produce uniformity and thereby, amongst other things, facilitate the transfer of cases between courts. However there are other aspects of a full set of admiralty rules which may be disadvantageous. The fact that it operates under separate rules would tend to set admiralty apart rather than help to assimilate it to general civil jurisdiction. There would be a large number of areas in which the admiralty rules differed from the ordinary rules of court simply because of the need to have comprehensive admiralty rules, even though there was no difference of policy or substance between the two sets of rules. In in per­ sonam actions in particular, there is no reason to make special admiralty rules unless there is some special feature of the action which requires it: one example is the provision

for preliminary acts in collision cases, and there are a few others.1-’ This raises the basic question of whether admiralty procedure should be assimilated as far as possible into the mainstream of general civil procedure, even if doing so results in a break with traditional

admiralty practice and rules, or whether admiralty should be preserved as a distinct area of litigation, with Australian admiralty procedure reflecting whatever degree of uniform­ ity can be found internationally. On balance it is suggested that the former represents the

10. The Bankruptcy Act 1966 (Cth) does not make any special provision for a formal body to advise on the amendment of the Bankruptcy Rules. The rule making powers of the Supreme Courts, Federal Court and High Court on the other hand are all vested either in the judges themselves or in rules committees. 11. PA Cornford, Submission 67 (14 November 1985) I. It was pointed out by Justice IF Sheppard, Sub­

mission 79 (24 February 1986) that ‘the task of persuading governments to alter Rules of Court has never been an easy one’. 12. Opinions expressed to the Commission by consultants and others were strongly in favour of a formal rules committee. Submissions making this point, in addition to those cited in n 11, included: Justice D

Yeldham, Submission 51 (10 October 1985) 1; Chief Justice Sir Laurence Street, Submission 63 (20 No­ vember 1985); NSW Attorney General, Submission 73 (16 December 1985). 13. For preliminary acts see para 295-7. For limitation actions see para 299.

234 / Civil Admiralty Jurisdiction

correct approach; that the benefits of assimilation outweigh its disadvantages.14 Hence only where there is a strong case for preserving a distinct admiralty rule, or where consid­ erations of convenience require it, should assimilation not be followed. This principle ob­ viously operates differently with respect to in rem as distinct from in personam actions. In rem actions are the characteristic, and unique, feature of admiralty, and the procedures for commencing such actions and for arresting and releasing ships and other property have to be spelt out in some detail. But even with in rem actions, many matters are also dealt with in general rules, and if there is no reason for a special admiralty rule on the matter none need be proposed. Accordingly, the Rules have been drafted on the basis that the ordinary rules of court will also apply to admiralty matters (unless they are in­ consistent with the Act or Rules). Only those features unique to admiralty need be dealt with in the uniform admiralty rules. Provision should be made for any gaps created by the interaction of the admiralty or ordinary rules to be filled by order of the court on ap­ plication.

284. Consequential Amendments to Existing Rules. If these recommendations are ac­ cepted consequential amendments to or repeals of existing admiralty rules will be neces­ sary in some cases. The Vice Admiralty Rules 1883 (UK) will cease to have effect with the repeal of the Colonial Courts of Admiralty Act 1890 (UK), as will the local admiralty rules in the four States where these rules apply only to admiralty jurisdiction under that Act.15 Cases commenced before the new legislation comes into force will continue to be governed by the 1890 Act, and these rules will accordingly need to be maintained in force

for an appropriate transitional period, after which they can be repealed. To avoid confu­ sion it would be preferable if the general Admiralty Rules in Victoria and Tasmania, and in the High Court16, were to be amended to apply only to admiralty proceedings com­ menced before the new Act comes into force. These rules could then also be repealed in due course.17 It remains possible for the rule-making authorities of any court exercising jurisdiction under the new Act to make additional provision, not inconsistent with the

Act or Rules, to cover other matters. However it would be desirable that such matters be raised first with the Commonwealth (either directly or through the proposed rules com­ mittee) with a view to the making of a general rule, so that all courts exercising admiralty jurisdiction can benefit from any reform, and to maintain uniformity. It may also be helpful to apply aspects of the rules to cases outside the scope of the proposed legislation. One example is the use of preliminary acts in collision cases. It is proposed that these be retained and their use expanded under the new Act and Rules.18 However, collision ac­ tions to which the Act does not apply will not be governed by the uniform Rules. If the recommendations on the geographical scope of arrest under the Act are adopted, for in­ stance, the Act will not apply to collisions between local vessels on internal waters.19 Ac­ tions in personam arising out of such collisions will proceed under the general rules of court.20 It will be a matter for the rule-making authorities of the States and Territories to

14. This approach has been generally supported in discussions on the Reference. See eg B Davenport, QC, Law Commission for England and Wales, Submission 37 (19 March 1985) 2. There has been only limited support for a more comprehensive approach, but see PA Cornford, Submission 67(14 November 1985) 1. 15. See para 280. 16. ibid. 17. Revision of the High Court's rules to deal with the removal of any original jurisdiction in admiralty is a

matter for the High Court itself, under the Judiciary Act 1903 (Cth) s 86: Sir Harry Gibbs, Submission 47 (16 May 1985). 18. See para 295-7. 19. See para 106, 115. 20. The Act will, on the other hand, be the sole source of jurisdiction in rem in relation to matters of admir­

alty and maritime jurisdiction. See para 194, 274.

The Form and Content o f Admiralty Rules / 235

decide to what extent they wish preliminary acts to apply or continue to apply to such ac­ tions.21

Judicial and Administrative Authority Under the Rules.

285. The Registrar and Marshal. The basic structure for the administration of admiralty jurisdiction in Australia, as in the United Kingdom, has traditionally involved the use of two principal court officers: the Registrar and the Marshal. The Registrar, as the chief ad­ ministrative officer of the jurisdiction, has been responsible for the issue of process and

the keeping of records, and has also exercised a limited judicial function at the direction of the Court, notably in relation to the assessment of damages, the taking of accounts22 and the taxation of accounts of sale.23 The Marshal, on the other hand, has been the ad­

miralty equivalent of the Sheriff, responsible primarily for the arrest, custody and ulti­ mate disposal of the res. This broad division of function between two such officials (by whatever names they may be called) is a feature of the rules of all of the existing Austral­ ian Colonial Courts of Admiralty. No suggestion has been made that any change is either necessary or desirable, and a similar distribution of function under the proposed Rules is therefore recommended. The possible constitutional difficulties raised by this course, par­ ticularly the conferral of ancillary judicial powers upon officers of the Federal Court, are

discussed below.24 Some difficulty seems occasionally to have been experienced under ex­ isting rules of court by Marshals in determining their precise powers, especially in rela­ tion to the custody and sale of the res.2S To avoid this it is clearly desirable that the Rules define as far as possible the obligations of both Marshals and Registrars and the powers that they can exercise, alone or on application to the court, in carrying out their func­

tions.26

286. Appointment of Admiralty Officials. The selection of existing officers or the appoint­ ment of new officials to carry out these functions is a matter best left to the individual courts concerned, as these courts are in the best position to decide what will fit with their other administrative arrangements. The courts should be permitted to appoint or nomi-21. The preliminary act requirements in New South Wales and in the Territories form part of their admiralty

rules and will cease to apply when the Colonial Courts of Admiralty Act 1890 (UK) is repealed: NSW Ad Rules 1952, r 3, 62; Vice Admiralty Rules 1883 (UK) r 54. The preliminary act requirements in Victoria also form part of their admiralty rules; those rules will continue to apply to any exercise of the ‘Admir­ alty jurisdiction’ of the Supreme Court after the 1890 Act is repealed (so far as not overidden by the new

Act and Rules): Vic Ad Rules 1975, r 2(1), 15(a); but this will be of little significance as regards internal waters since actions arising there would probably fall outside the Court’s ‘Admiralty jurisdiction’. The preliminary act requirements in Queensland, South Australia and Western Australia form part of the gen­

eral rules of their Supreme Courts and will survive the loss of their admiralty rules upon the repeal of the 1890 Act: Qld RSC, 0 60 r 1A, 0 23 r4 ; SASCR, 0 39 r 1(2), O 19 r 26(1); WARSC 1971, 0 74 r 1(2), O 20 r 23. Their preliminary act requirements apply to collisions generally, not just collisions within the court’s admiralty jurisdiction. Tasmania's preliminary act provisions also apply to collisions generally: Tas RSC 1965, 0 21 r 32. 22. See NSW Ad Rules 1952, r 104; Vic Ad Rules 1975, r 53; Qld RSC, 0 53A r2 ; Tas RSC 1965, Pt IV r 61,

62; SASCR, 0 39 r 51; WARSC 1971, O 74 r 34. See also para 287. 23. See NSW Ad Rules 1952, r 120; Vic Ad Rules 1975, r 77; Tas RSC 1965, Pt IV r 86; SASCR, O 39 r 66; WARSC 1971, 0 74 r 47(2). The Registrar has also usually enjoyed limited authority to release property from arrest, to determine the sufficiency of bail and to assess the adequacy of agreements filed as orders

of court: see, eg NSW Ad Rules 1952, r 40 (release), r 58 (sufficiency of bail); SASCR, O 39 r 49, WARSC 1971,0 74 r 33 (agreements). 24. See para 287. 25. See eg the range of directions sought by the Marshal in C Clausen Damskibs-Rederi A /S and Clausen

Steamship Company (Australia) Ply Ltd v The Ship Om Alqora (No 2) (1985) 38 SASR 494 (SA Sup Ct). 26. This was strongly urged by the South Australian Crown Solicitor in light of the difficulties experienced in The Om Alqora (No 2) : SA Crown Solicitor, Submission 50 (20 October 1985) 2.

236 / Civil Admiralty Jurisdiction

nate a Registrar and a Marshal and such Deputies as they may require. For the Supreme Courts this will probably mean the appointment of the officers currently carrying out the relevant duties. Indeed, this is desirable, given the need to maintain and build upon exist­ ing administrative experience in the range of functions exercised by these officers. Al­ though the incidental judicial powers of Registrars will need to be exercised by an officer of the court in question, there should be a broader power to appoint Deputy Marshals to perform particular tasks (for example, service and arrest in more remote areas).27

287. Assessment of Damages and Other Ancillary Powers of Registrars. In the United States the 1966 merger of the Federal Rules of Civil Procedure preserved the admiralty rule whereby complicated issues of damages could be referred to a master, referee, audi­ tor or assessor and also extended the ambit of the rule to cover general civil cases.28 How­

ever references are apparently very much the exception rather than the norm.29 The ques­ tion of using Registrars to assess damages is linked to the way in which admiralty permits representative actions.30 Where the action is brought by ‘the owners of the cargo lately on board the ship ...’ or ‘the master, officers and crew of the ship ...’ it may considerably sim­ plify the process of litigation if a court can determine the issue of liability and then leave the individual claimants such as cargo owners or seamen to itemise and prove their indi­ vidual damage claims before the Registrar in separate hearings. For this reason there is considerable justification for preserving the admiralty tradition of referring assessment is­ sues to Registrars.31 Until recently, a provision to this effect would have been constitu­ tionally suspect as a conferral of federal jurisdiction on officials of State courts who (in most States at least) do not constitute part of the State court in the strict sense.32 However the earlier decisions to this effect have been overruled by the High Court33 3 4 and there is accordingly no constitutional barrier to the conferral of such powers on Registrars of State courts. So far as the performance of ancillary judicial powers by officers of federal courts is concerned, the matter is more difficult. In R v Davison 34 the High Court held that the power of Deputy Registrars in Bankruptcy to make sequestration orders involved an exercise of judicial power which could only be vested in courts established under Chapter III of the Constitution. However the case is not authority for a rule that un­ tenured court officers such as Masters or Registrars cannot exercise ancillary judicial powers under Chapter III. At least four of the majority justices in R v Davison held that the Deputy Registrars in Bankruptcy were not officers of the Federal Court of Bank­

ruptcy at all, so that that issue did not arise for decision.35 In Davison’s case Chief Justice Dixon and Justice McTiernan pointed out that there was ‘no distinct decision of this Court that under Chapter III no authority can be given by statute for discharge of certain duties falling upon a court, subject to judicial confirmation or review, by an officer of the

27. cf the UK practice of using customs officers to serve warrants in appropriate circumstances: see KC McGuffie, PA Fugeman & PV Gray, Admiralty Practice. Stevens, London, 1964 and Supp 1975, para 266. 28. Moore's Federal Practice. M Bender, NY, looseleaf vol 7A (Admiralty) para 61(3] discussing Fed R Civ P, r 53(b). 29. ibid. 30. See The Marlborough Hill 11921] 1 AC 444, 456-7 on representative actions in admiralty. 31. This view was supported by the English Admiralty Judge, Justice B Sheen, Submission 22 (29 January

1984) 2: 1 would retain the power to refer the amount of the damages to a Registrar for assessment. It short­ ens the trial which can be confined to the question o f liability. Thereafter the parties frequently agree the damages. If there is an important issue they can apply to have that issue determined by the Judge. 32. Kotsis v Kotsis (1970) 122 CLR 69; Knight v Knight (1971) 122 CLR 114. 33. Commonwealth v Hospital Contribution Fund o f Australia (1982) 40 ALR 673. 34. (1954) 90 CLR 353. 35. Under the Bankruptcy Act 1924 (Cth) Deputy Registrars were executive officers attached to the Court but

not part of its structure. See id, 362, 365 (Dixon CJ,