The first group of issues: whether Comandate Marine by its conduct elected to waive or abandon, waived, abandoned, or otherwise lost its right to insist on arbitration
53 The primary judge concluded that Comandate Marine had elected not to pursue its arbitration proceedings by beginning its in rem proceedings against Boomerang I without placing on the writ its intention to seek a stay under s 29 of the Admiralty Act or otherwise indicating on the writ that the proceeding was brought solely for the purpose of obtaining security for the London arbitration. Secondly, he concluded that by the conduct of both parties in electing to litigate in the Court the arbitration agreement had been, in substance, abandoned. So his Honour concluded that the arbitration agreement was either "incapable of being performed" or "inoperative" for the purposes of s 7(5) of the International Arbitration Act.
54 Pan sought in argument to bolster these conclusions by putting the matter in two other ways. First, it said that the filing of the in rem writ against Boomerang I was the acceptance by Comandate Marine of Pan's repudiation of the arbitration agreement; and, secondly, it said that there was an implied contractual abandonment of the arbitration agreement. These ways of putting the matter were formalised in a notice of contention filed after the hearing on 1 November 2006. (It was not submitted by Pan that Comandate Marine's conduct was itself a repudiation of the arbitration agreement. Though, in fairness, it was said to be an abandonment of the arbitration agreement.)
55 For the reasons that follow, in my view: the primary judge erred in reaching the conclusions that he did, Pan should not be permitted to raise the new ways of putting the matter on appeal and, even if Pan be permitted to do so, on the material before the Court, it should not be concluded that there was an acceptance by Comandate Marine of a repudiation by Pan or that the parties had impliedly agreed to abandon the arbitration.
56 Central to the reasoning of the primary judge was the form of relief in the writ in rem filed on 23 June 2006 and served on the ship, together with the arrest warrant, late on 23 June or in the early hours of 24 June 2006. The writ was, relevantly, in the following terms:
"BY THIS WRIT the Plaintiff commences action against the Ship specified below.
DATE OF ISSUE: 23 June 2006
PARTICULARS OF PROPERTY: The Ship "Boomerang 1" registered in Cyprus.
AMOUNT CLAIMED OR OTHER RELIEF SOUGHT:
1. arrest of the ship "Boomerang I";
2. damages;
3. interest;
4. costs.
PARTICULARS OF CLAIM:
1. The Plaintiff's claim is for damages for breach of a time charter entered into between the Plaintiff and Pan Australia Shipping Pty Ltd on or about 19 April 2006 in respect of the ship "Comandate". In breach of the time charter, Pan Australia Shipping Pty Ltd has:
(a) failed to obtain valid crew visas for the intended trade of the ship "Comandate";
(b) wrongfully terminated the charter in respect of the ship "Comandate"; and
(c) failed to make hire payments due under the time charter.
The Court's jurisdiction in respect of this claim arises under sections 10, 17 and 4(3)(d), (f), (o) and (w) of the Admiralty Act.
RELEVANT PERSON:
Pan Australia Shipping Pty Ltd
the demise or bareboat charterer of the vessel "Boomerang 1"
…
TO THE DEFENDANT
If you wish to defend this claim, you must, within 21 days after this writ is served on you, file an appearance."
57 The writ was based on Form 6 of the Admiralty Rules. In Form 6, adjacent to the heading "relevant person" there is a footnote which states: "Refer to Rule 15 and specify the relevant person in relation to the claim, if known to the plaintiff." Rule 15 is in the following terms:
"(1) Initiating process in a proceeding commenced as an action in remshall specify a relevant person in relation to the maritime claim concerned as a defendant.
(2) A relevant person may be specified by reference to ownership of, or other relevant relationship with, the ship or other property concerned."
58 The phrase "relevant person" is defined in s 3(1) of the Admiralty Act as meaning in relation to a maritime claim a person who would be liable on the claim in a proceeding commenced as an action in personam. As to its meaning, see Owners of the Motor Vessel 'Iran Amanat' v KMP Coastal Oil Pte Ltd (1999) 196 CLR 130.
59 Section 29 of the Admiralty Act provides for the staying of proceedings commenced under the Admiralty Act in favour of arbitration (in Australia or elsewhere) or litigation elsewhere on condition that the ship or other property be retained as security for the award or judgment in the arbitration or litigation. Thus, in practice, in rem proceedings can be commenced only as security for foreign arbitration or litigation. In the practice of Admiralty in Australia, a regular occurrence is the arrest of a ship under in rem proceedings without any further in personam proceeding occurring. That is, ships are regularly arrested for security for an arbitration award or foreign judgment.
60 In my respectful view, the first error committed by the primary judge was to posit the existence, at the point of the filing and serving of the writ in rem, of two mutually inconsistent rights, the exercise of one of which was inconsistent with the existence of the other. Comandate Marine was a party to a contract whereby it had agreed to submit disputes between it and Pan under the time charter exclusively to arbitration. It commenced that arbitration. It commenced in rem proceedings against the ship. This is an action against the ship itself: Aichhorn & Co KG v The Ship MV 'Talabot' (1974) 132 CLR 449 at 455-56. Upon the entry of appearance by the relevant person the action proceeds also as if it were an action in personam, though it does not cease to be an action in rem: Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad' (1976) 136 CLR 529 at 538. For present purposes, however, in dealing with the question of an election between mutually inconsistent rights, it is unnecessary to stress the in rem character of the action, and the in rem action can be assumed to be an action between Pan and Comandate Marine. I will deal with the correctness of this assumption in due course.
61 The commencement of the action in rem may have greater, or lesser, significance depending upon the circumstances. It is not necessary to conclude that such an act cannot, in any circumstances, amount to a repudiation of an agreement to resolve disputes in a particular way. All the relevant circumstances would need to be examined in order to assess that. The approach of the primary judge was to ascribe a significance to the writ, in the form it took, as inconsistent with the continued existence of the entitlement and obligation to take the dispute between Pan and Comandate Marine exclusively to arbitration. There are a number of difficulties with this conclusion.
62 The principal difficulty is the absence of two mutually inconsistent rights, in the sense that exercise of one presupposes the non-existence of the other. I agree with Austin J in ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896 at [58] that the selection of the method of dispute resolution is not between inconsistent rights. See also Yimin Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133 at [15] per Chernov JA, with whom Ashley JA and Bongiorno AJA agreed at [28] and [29], respectively. The notion of inconsistent rights was explained by Stephen J in Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 641-2: the rights are inconsistent if neither may be enjoyed without the extinction of the other. For instance, when a contract is repudiated the innocent party either accepts the repudiation and ends the contract or chooses not to end the contract. Both cannot be done - the contract is either ended or on foot. A litigant who has bound itself to arbitrate and commences so to do and who files court proceedings as well may be acting oppressively or abusively and may be in breach of contract, but has not elected between inconsistent rights. Here, the filing of the writ did not extinguish the rights under the arbitration agreement; it may or may not have constituted, or formed part of, an inconsistent course of conduct; it may or may not have amounted to a breach of contract; but it did not cause or presuppose the extinction of the rights under the arbitration agreement. To express the matter in the terms of Professor Hohfeld used by Mr Justice Handley in Estoppel by Conduct and Election (Thomson/Sweet and Maxwell 2006) at 230-231:
"The elector has a power to change the legal rights and duties of himself and another with a corresponding liability in that other to submit to the change."
63 Undoubtedly, the institution of some legal proceedings can work an election in some circumstances: the commencement of ejectment proceedings effects a forfeiture: Scarf v Jardine (1882) LR 7 App Cas 345 at 361; commencement of proceedings to enforce a contract which could be rescinded for fraud or other cause is an election to affirm; many other examples could be given. No such inconsistency arises here.
64 It was likely, and no doubt assumed by those advising Comandate Marine, that Pan would, in some fashion, move to protect the ship of which it was demise charterer. Indeed, Pan's first (and only) substantive step in the proceeding after filing an appearance was to challenge (successfully) the authority of the Court to hear the in rem action. There can have been little doubt in those who advised Comandate Marine that there would be a debate about the validity of the invocation of the authority of the Court given the terms of s 19 of the Admiralty Act and the well-known jurisprudence discussed in the reasons of the Full Court: see Comandate Marine Corp v The Ship 'Boomerang I' (2006) 151 FCR 403 at 407-409 [18]-[26]. If s 19 were validly invoked, Comandate Marine could use s 29 to stay the action once security had been put up. If Pan did not appear (an unlikely, but theoretical, scenario) Comandate Marine would have had to decide whether to press on or otherwise make an application under s 29. I do not see how the form of the writ, without an endorsement as to an intention to use s 29 of the Admiralty Act was decisive. Ordinarily, there is nothing conclusive about the form in which a writ is issued or about the claims made in a writ: see United Australia Limited v Barclays Bank Limited [1941] AC 1 at 18-19. Taken alone, the commencement of the in rem action did not work an election or waiver of any right to arbitrate. There was no step by Comandate Marine unequivocably inconsistent with the existence of the right and obligation to arbitrate.
65 This is not to say that legal proceedings may not be conducted to such a point that the only conclusion is that the party can be taken to have waived or abandoned the right to arbitrate: cf The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 472 per Toohey J. Thus, at this point it is necessary to appreciate the balance of the evidence insofar as it bears on the conduct of the parties, in particular the whole context of the commencement of, and abortive attempt to prosecute, the Boomerang I proceedings in order to see whether Comandate Marine waived (in the sense of abandoning) the right to arbitrate and to assess the two new ways the matter was put on appeal: implied contractual abandonment and acceptance by Comandate Marine of the asserted repudiation by Pan.
66 The facts earlier set out provide the background to the commencement of the in rem action against Boomerang I and her arrest. The following further facts are also relevant. I have ignored the time differences between Sydney, London and New York in discussing these events.
67 After the arrest of Comandate on 9 June 2006, a letter of guarantee was provided on behalf of Comandate Marine on 13 June 2006. On 14 June 2006, a number of things occurred: a conditional appearance was filed by Comandate Marine; Comandate was released; and Comandate Marine in a letter to Pan articulated, and gave particulars of, its claim against Pan in excess of USD 4m, gave formal notice of the commencement of the arbitration and appointed an arbitrator on its behalf.
68 On 15 June 2006, Mr O'Neil of Stephenson Harwood (Comandate Marine's London solicitors) sent an email to Ms Wilmshurst of Ebsworth & Ebsworth (Pan's Sydney solicitors). This email was sent in the context of some telephone discussions of which there was no direct evidence. It is unnecessary to deal with most of the email that was concerned largely with the perceived relative merits, or lack thereof, of the parties' respective claims. Importantly, however, Mr O'Neil made an unequivocal request for a statement from Pan as to the arbitration clause. He said:
"Finally, please confirm by tomorrow morning that your clients accept and will abide by the exclusive English law and arbitration provisions provided under the governing Charter, or whether they will seek to have this dispute resolved and or litigated in Australia. Unless we have your unequivocal confirmation by tomorrow morning our time, we hereby place you on formal notice that we will have no choice but to apply for an anti-suit injunction in the English High Court on Monday to restrain any substantive proceedings in Australia. Please be guided accordingly and we reserve all of our clients rights on costs in the event that such an application is necessary."
69 On the following day, 16 June 2006, Ms Wilmshurst respondent to this part of Mr O'Neil's email as follows:
"The threatened anti-suit injunction is, in our view, misconceived. If your client is minded to seek a stay of the in rem action, we will obtain instructions in relation to our client's attitude to such an application including the costs of the proceeding to date."
70 Mr O'Neil respondent to this part of Ms Wilmshurst's email was as follows:
"Unless you revert now as requested yesterday with your clients' unequivocal agreement and affirmation that any and all disputes between them and owners will be resolved in accordance with English Law and arbitration as provided by Clause 45 of the governing CP, we will proceed as previously notified and will recover the costs of doing so against your clients. You have formal notice of our intentions."
The parties had also been discussing the provision of security by Pan for Comandate Marine's claim. As to this, in this same email, Mr O'Neil stated:
"Absent the voluntary provision of security, our clients will now take whatever steps are necessary to properly secure their claim."
71 Twenty minutes later (it is not clear whether there had been an intervening telephone discussion), Mr O'Neil once again taxed Ms Wilmshurst for her instructions about the arbitration, saying:
"I repeat that I now want your clients' categoric and unequivocal agreement, confirmation and affirmation that all disputes between our clients will be resolved exclusively in accordance with the dispute resolution clause of the CP, i.e. English law and arbitration. Nothing less will do. You are on Notice."
72 A conversation between Mr O'Neil and Ms Wilmshurst then took place (still on 16 June), following which Ms Wilmshurst sent an email stating:
"Further to our conversation of a moment ago, I do not have Charterers' instructions on the matter you have sought an unequivocal response upon through the course of your day today. Should you wish to attempt to construe my comments as being confirmation of our client's position then you will be deliberately misconstruing the position.
Personally I had thought that we have had a professional and constructive dialogue to date and hope this can continue."
73 Later still on 16 June, Mr O'Neil responded in a short email, the totality of which was as follows:
"You know what we want and you are deliberately equivocating. You have until our Monday morning to respond as requested."
74 The strength of the correspondence from Mr O'Neil caused Ms Wilmshurst to express her views more than once (by way of suggestion) that Mr O'Neil "tone down" his correspondence. Whether or not the tone of Mr O'Neil's communications was appropriate need not be debated. What was clear, however, was the blunt and forceful proposition put forward by him that his client wished to arbitrate and that his client demanded an unequivocal acceptance by Pan that it would submit all disputes to arbitration in accordance with the disputes.
75 Also on 16 June, Comandate Marine commenced proceedings in the United States District Court, Southern District of New York claiming maritime attachment under Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims. The Verified Complaint filed stated that Comandate Marine sought the "issuance of process of maritime attachment so that it may obtain security for its claims against [Pan]." The complaint made clear the existence of the arbitration. On the same day, an order for maritime attachment was made by Judge Crotty of the United States District Court.
76 On 17 June 2006, Ebsworth & Ebsworth sent by facsimile a letter to Stephenson Harwood. In the light of Pan's submissions on appeal that it (Pan) had repudiated its own obligations under the arbitration agreement by 23 June 2006, it is necessary to set the letter out in full:
"We refer to our emails dated 15 and 16 June 2006.
We note that your client will apply for an anti-suit injunction on Monday morning unless our client provides by then its "categoric and unequivocal agreement, confirmation and affirmation that all disputes between our clients will be resolved exclusively in accordance with the dispute resolution clause".
As you know, we have indicated that it is our view the application you intend to bring is misconceived and entirely inappropriate at this stage. The reasons for this view on our part include the following:
1. Our clients commenced in rem proceedings in the Australian Courts to obtain security for the claim against your client and the Australian Courts clearly have jurisdiction in relation to such arrest proceedings.
2. It is not a breach of the arbitration clause to have brought such proceedings in the Australian Court.
3. Owners only appointed their arbitrator on 14 June.
4. Charterers are considering their position and will respond to Owners' appointment of an arbitrator at an appropriate time which will be within a matter of days.
5. Charterers have not commenced in personam proceedings in Australia, nor have they threatened to do so at any stage.
6. You have provided nothing to suggest that there is such urgency that our client should not be entitled to provide instructions on the confirmation you have sought within a reasonable time frame rather than within the 24 hour period prescribed in your initial demand.
We understand that pursuant to the Protocol Practice Direction, litigation should be viewed as the last resort, not the first resort. The heavy-handed approach adopted by your client in respect of the foreshadowed application is inconsistent with the obligations under this document.
Any application for an anti-suit injunction should be made on notice by summons, and our client is able to make appropriate arrangements for service. There is no justification whatsoever for an urgent ex-parte application. If, regardless of this, your client proceeds with an ex-parte application then we ask that a copy of this letter and our emails dated 16 June 2006 are shown to the Court."
77 The letter was astute (as Ms Wilmshurst had been in her prior emails and, to the extent one can infer from them, in conversation) not to deny the binding nature of the arbitration agreement.
78 Mr O'Neil's response was by email on 17 June and conformed with the direct and uncompromising tone and content of earlier correspondence from him. It stated:
"Thank you for your fax which will of course be brought to the Court's attention.
Once again, you have sought to avoid directly answering my very simple request, attempting to justify you avoidance and delay on the basis that you have had insufficient time to take instructions. Your points 4, 5 and 6 equivocate further.
We will be applying to Court on Monday or Tuesday of next week and you are on notice of this fact. You have had more than sufficient time to seek instructions from your clients as to whether they agree that all disputes between them arising under and/or in connection with the CP will and should be exclusively resolved in accordance with the English law and arbitration provision of the CP. The fact that they (and you) have not confirmed and affirmed this immediately is very telling.
The issue is very simple. Are your clients intending to bring in personam proceedings in Australia, yes or no?
I look forward to hearing from you."
79 Ms Wilmshurst's response, again on 17 June, was as follows:
"Again you are speculating without any basis. As you know I intend to take instructions and revert but do not consider your heavy-handed approach means that it must be within the unreasonable time frames that you are seeking to dictate."
80 On 19 June 2006, Mr O'Neil sent a two page facsimile to Ms Wilmshurst. Again because of Pan's submission as to its own repudiation and the acceptance of it by Comandate Marine it is necessary to set out this letter in full:
"We refer to your fax of 17 June 2006. Obviously there are a number of matters contained within your fax about which we do not agree, some of which need to be addressed. On behalf of our client we have since Thursday 15 June 2006 been asking you to answer what is, with respect, a very straight forward question. Despite repeated opportunities to do so you have failed completely to answer the pertinent question, namely, does your client intend to honour its contractual agreement as evidenced in the arbitration clause of the Charter?
Because you have deliberately refused to answer this simple question we have taken steps to prepare for an urgent ex parte application for the issue of an anti-suit injunction to restrain your client from continuing or prosecuting any proceedings against our client otherwise than via the mechanism contemplated in the Charter. You have been no [sic] notice of our client's intended course of action for adequate time. Contrary to your self-serving protestation your client has been allowed more than sufficient time to consider its position (especially when contrasted with the notice our client received prior to the arrest of the vessel).
On 14 June 2006 your Partner Mr Drew James inquired whether our client would be agreeable to all disputes being determined in the Federal Court of Australia or whether they press for those matters to be determined by way of London arbitration. It is clear from service of the Notice of Commencement later that same day that Owners want to give effect to the contractual bargain and do not consent to a non-contractual jurisdiction.
On 16 June 2006 you asked whether it was my client's intention to seek a stay of the in rem proceedings. The critical question in that regard is whether your client would agree to a stay of those proceedings in favour of having the dispute resolved by way of London arbitration in accordance with the arbitration clause in the Charter? Clearly this is an issue that you have turned your mind to and one about which from your correspondence it is reasonable to assume that you have discussed with your client. As mentioned above we are instructed to (and are ready to execute) apply for an anti-suit injunction against your client to give effect to the parties agreement. We intend to appear before the Court on that application on Thursday 22 June 2006. By that date you will have been on notice of the application for 7 days, which on any view is a reasonable period of time.
We therefore request your clear and unequivocal answer to the question of whether your client would agree to a stay of the Australia in rem proceedings? Please answer this question on or before our opening Thursday morning, 0800 hours local time or 1700 hours AEST.
Please note, if you fail to answer the question whether our client will agree to a stay of the in rem proceedings in favour of London arbitration , or give a qualified/equivocal answer to same, we shall assume that to be conduct on instruction from your client evidencing an intention to refuse to abide by the terms of the Charter and will ask the Court to draw that inference when we appear for the anti-suit injunction.
Finally, if your client is not prepared to unequivocally confirm that it will abide by its contractual bargain and agree to submit to the arbitration mechanism contained in the Charter (or fails to answer within time) it would be useful if you could nominate a firm of London solicitors who will be instructed on behalf of your client.
We look forward to hearing from you."
[emphasis in original]
81 On the following day, 20 June 2006, Pan sought and was granted the anti-anti-suit injunction by Emmett J. The matter came before Rares J at 11.10 am on 22 June 2006. His Honour delivered extempore reasons between 4.34 pm and 5.17 pm. The conduct of the motion that day occupies 73 pages of transcript. In the light of Pan's submission that its conduct leading up to 23 June was a repudiation of the arbitration agreement, it is necessary to refer to aspects of the transcript. Pan was represented by Dr Bell who appeared with Mr Gray, Comandate Marine by Mr Street SC who appeared with Mr McLure.
82 The first matter discussed was the conditionality of the appearance of Comandate Marine. It is unnecessary to deal with the discussion at length, but a concern was expressed by Mr Street about the creation of an in personam proceeding by the filing of an unconditional appearance.
83 In describing the purpose of the application for the anti-anti-suit injunction, Dr Bell said at pp 5, 6 and 8 of the transcript:
"…What we seek to achieve, your Honour, by the relief we seek is to preserve the status quo in the classical sense. The status quo would allow, an appearance having been entered, these proceedings to run along to the stage that an in personam claim is filed setting out the causes of action sought to be pursued on behalf of the plaintiff and when and if that claim is filed it will be open to the defendant to move, if so advised, for any form of interlocutory relief in this court including a stay of the proceedings pursuant to the provisions of the International Arbitration Act.
…
…[T]he serious question to be tried relevantly is whether there is an arguable case that this court should move now in light of the evidence which I will identify shortly to preserve its own ability to control these proceedings including its ability under the International Arbitration Act to impose conditions which may or may not be considered appropriate by the court in relation to the future conduct both of these proceedings and if the court finds there is a binding arbitration agreement and the dispute is sought to be agitated by my client is otherwise within the scope of that arbitration agreement if the proceedings were otherwise to be stayed including the question of whether any such dispute is capable of settlement by arbitration.
…
The serious question to be tried is whether or not this court should on the basis of the material before the court, namely a claim at a very early stage where there has been a defective appearance up to now and where factual inquiries are still being undertaken, whether this court should act to preserve its ability under the International Arbitration Act, if that Act applies, to impose conditions to ensure that potential statutory claims aren't able to be shut out on the merits through the combined operation of an arbitration clause and a foreign government law clause as has happened to Australian statutory claims in the past as a result of the very kind of application which has been threatened by my learned friend's clients in England.
In my submission, and this is why we put it on an interlocutory basis, what we wish is a time within the time contemplated by the rules of court, that is to say the time within which an in personam claim is to be filed to formulate fully the claim my clients seeks to make including formulation of potential Trade Practices Act claims and to hold the status quo until that time,
…
…obviously one of the reasons of relevance of the TPA claim is that there is a live issue as to whether or not such claims are capable of settlement by arbitration or the parties should be intended to have referred as Emmett J said in the Full Court in Kiukiang Korea [sic] whether you would attribute to the parties an intention to refer an Australian statutory claim to commercial men in London, etcetera, those sort of considerations
…
But also even if it is within the scope of this agreement, and we simply wish to, the reason this relief is being sought now, we wish to preserve the possibility of an argument that even if our friends establish that there is an arbitration agreement and even if they establish that some or all of an in personam claim falls within the scope of the arbitration agreement on its proper construction the court should still, we wish to preserve the ability ask the court to impose conditions of the kind Allsop J indicated which are designed to ensure that that claim is not defeated without ever being heard on its merits. And the rationale of that, as I say, is the approach English courts take to picking up or not picking up relevantly strange statutory claims."
84 It is unnecessary to set out further parts of the transcript. It was plain that Dr Bell was putting Pan's submission that there was a fear that an English Court would issue an anti-suit injunction thereby depriving Pan of the available arguments relevant to the operation of the International Arbitration Act, including the proper scope of the arbitration clause and the possibility of conditions on any stay. It was made clear that Pan would rely heavily on the approach of the Full Court in Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) (1998) 90 FCR 1 (The 'Kiukiang Career').
85 During the hearing Mr Street made it clear that Comandate Marine would move the Court for a stay under the International Arbitration Act.
86 Stopping at this point, if Pan is to show that the filing and serving of the writ on 23 June 2006 was an acceptance by Comandate Marine of a repudiation by Pan, it must be recognised that on 14 June 2006, Comandate Marine commenced the arbitration, thus waiving any right to accept any repudiation by Pan in commencing the in rem proceedings on 9 June 2006. In any event, taking the whole of Pan's conduct up to and including 22 June 2006, it is not clear to me that Pan evinced an intention not to be bound by the arbitration agreement. Both Ms Wilmshurst and Dr Bell were carefully stating Pan's position, and stopping short of repudiating any obligation under the arbitration clause. They wanted issues concerning the arbitration clause addressed in Australia, in the first instance, under the International Arbitration Act. That Ms Wilmshurst did not accede to Mr O'Neil's demands does not necessarily amount to a repudiation. Mr O'Neil's views as to what his client was entitled and his demands therefor did not unilaterally set the boundary of conduct conforming to the contract. Dr Bell relied on an English case in the Court of Appeal (Downing v Al Tameer Establishment [2002] EWCA Civ 721) in support of the propositions that his client had repudiated the arbitration agreement and that Comandate Marine had accepted that repudiation. I find no assistance in the case in this respect. The questions whether a party's conduct evinces an intention not to be bound by a contract or whether another party has accepted such is not to be answered by examining the different facts of another entirely unrelated case or even one with some similarities. To the extent that the case was cited for the proposition that a refusal to answer questions such as those posed by Mr O'Neil of Mr Wilmshurst was repudiatory conduct, it only needs to be said that no such legal principle exists. (The existence of the case may, however, in fairness to Mr O'Neil, explain why he thought it necessary or appropriate to engage in the correspondence that he did.)
87 The orders made on 22 June 2006 continued the anti-anti-suit injunction up to 13 July. Orders 7, 8 and 10 dealt with the filing by Comandate Marine of its motion for a stay and by Pan of its statement of claim and provided for the hearing of the notice of motion, as follows:
"7. Leave be granted to the defendant to file and serve on or before 5 pm 23 June 2006 an amended notice of motion seeking, as it may be advised, a stay under s 7 of the International Arbitration Act 1974 (Cth).
8. The time for filing of any statement of claim under Order 22 of the Admiralty Rules 1988 (Cth) be extended to 12 noon on 5 July 2006.
…
10. The hearing of the amended notice of motion of the defendant to be filed pursuant to Order 2 [sic: 7] be provisionally fixed before Rares J at 10.15 am on 13 July 2006."
88 Much was made in argument by Dr Bell that Comandate Marine did not comply with order 7. The notice of motion was not filed and served on 23 June 2006, rather the in rem writ against Boomerang I was. It was not filed until 4 July 2006. This demonstrated, it was submitted, a clear change of approach which could be taken as reflective of a decision by Comandate Marine to litigate in Australia and not arbitrate in London. One difficulty with this submission (indeed an obstacle of some size) was that though the notice of motion was not filed on 23 June 2006, it was served on Ebsworth & Ebsworth on that day. Indeed at a subsequent directions hearing (on 7 July 2006) Dr Bell himself suggested to the primary judge that an order regularising the matter should be made, nunc pro tunc. The judge did so. Thus, the filing of the writ in rem against Boomerang I was in the context of Comandate Marine continuing to assert its wish for the dispute to be arbitrated. I reject the submission of Dr Bell that the timing of this filing reflected a reversion to the previous course of action, after a failed attempt to litigate in court. There is nothing to suggest that Comandate Marine ever evinced an intention to abandon the arbitration or that the filing of the notice of motion was not simply the completion of the steps taken on 23 June 2006 to comply with the primary judge's order.
89 On the first day (Saturday) after the filing of the writ against Boomerang I, Pan filed an appearance as bareboat charterer and moved to set aside the writ. The filing of an appearance by Pan marked the commencement of the time from which the action, if validly commenced, could be said to proceed as if it were an action in personam. Comandate Marine did not file a statement of claim. The order of the Full Court setting aside the writ made on Tuesday 27 June 2006 was stayed until 29 June 2006 to allow an application to the High Court of Australia. On 28 June 2006, Comandate Marine filed a summons in the High Court of Australia seeking a stay of the orders of the Full Court and seeking the issue of a warrant for the re-arrest of Boomerang I. Heydon J heard the motion on the following day and dismissed the summons. Special leave, which was also sought, was later dismissed.
90 For the short life of the litigation represented by the in rem action against Boomerang I, the parties were focussed on the question of the statutory authority, or lack of it, for the invocation of the authority of the Court under Part III of the Admiralty Act. No occasion for Comandate Marine arose to press an articulated claim in a statement of claim or otherwise. No occasion arose for Comandate Marine to be taxed with the issue as to whether it was oppressive or abusive to be proceeding with an in personam claim and the arbitration. No occasion arose for Comandate Marine to apply for a stay under s 29 of the Admiralty Act.
91 The action against Boomerang I was capable of being prosecuted as a means of obtaining security for the arbitration. The parties had discussed Pan's provision of security and Comandate Marine had obtained orders for maritime attachment in New York plainly for that purpose. A strong, indeed strident, body of communication made plain Comandate Marine's insistence on arbitration. The filing of a writ which could be used to found an in personam claim against Pan prosecuted in this Court or which could be used for a more limited purpose contemplated by s 29 of the Admiralty Act did not unequivocably bespeak an abandonment of, or change to, that position. At most, it can be seen as the making of a tactical move to obtain an advantage in a litigation landscape which was unfolding and which was uncertain.
92 I do not see how the failure to inscribe in the writ an intention to apply for a stay under s 29 of the Admiralty Act converts what was done into an abandonment of a position consistently maintained. For the reasons that I expressed earlier, it was not a choice between inconsistent rights. When one examines fully the context, it was not an unequivocal statement either that Comandate Marine wished to abandon the arbitration or accept any repudiation by Pan (even assuming that such occurred) of the arbitration agreement.
93 If, as in fact occurred, the Court refused to stay the proceedings that had been brought by Pan and continued the anti-anti-suit injunction, the arbitration would be effectively stopped. That was a possibility that was plain to any experienced litigator faced with the facts that I have outlined. In those circumstances, the commencement of the in rem proceedings against Boomerang I may have had (and could be seen at the time to have had) a significance beyond obtaining security for the arbitration. The litigation landscape was less than clear. The step taken by Comandate Marine can be seen as one designed to advance its position whatever the outcome of the interlocutory debate in this Court. As such, it was plainly not an unequivocal statement of abandonment of the arbitration or of any right to seek a stay of the court proceedings or that Comandate Marine had decided to prosecute the proceedings in personam to the exclusion of proceeding with the arbitration.
94 Significant reliance was placed by Pan on the decision of Whelan J in La Donna Pty Ltd v Wolford AG (2005) 194 FLR 26. The defendant, an Austrian company, had appointed the plaintiff, an Australian company, as its Australian distributor. The distributorship agreement had a clause providing for arbitration in Austria. The plaintiff brought proceedings in the Supreme Court of Victoria. The defendant sought a stay. One of the contentions of the plaintiff was that the defendant's conduct in the legal proceedings was such as to have waived the right to arbitrate and so the arbitration agreement was inoperative for the purposes of s 7(5) of the International Arbitration Act. The proceedings were begun in April 2005. Ex parte orders had been made. A contested interlocutory hearing followed. In May 2005, the defendant applied for security for costs. The affidavits in support detailed the work to be done in the hearing. A mediation occurred. (The report is not clear whether this was a mediation of the application for security or of the whole dispute.) The application for security came on before a Master. It was dismissed on the basis that the defendant had failed to demonstrate a sufficiently weak financial position of the plaintiff. In August 2005, without any prior intimation, the defendant sought a stay under s 7(2) of the International Arbitration Act. Whelan J dealt with the argument of waiver in the sense of abandonment by placing particular reliance on the application for security for costs. The other steps he thought to be insufficient to amount to a waiver. As to the application for security, Whelan J said the following at [25]-[27]:
"The application for security for costs falls into an entirely different category, however. That application was based on the explicit premise that the litigation would proceed to trial in the absence of a settlement, and that the matters the subject of the proceeding would be determined by the Court.
Wolford sought an advantage, or at least sought to impose upon La Donna a burden, which was based upon the proposition that the litigation would proceed in this Court, that the defendant would take steps, and that the defendant would incur costs in taking those steps, in that litigation in this Court. This step was an unequivocal abandonment of the alternative course, being an application for a stay and a consequent arbitration.
To allow Wolford to rely on the arbitration provision now would be to permit it to approbate and reprobate. In my view, it has waived the provisions and thereby rendered them inoperative."
95 The essence of Whelan J's views was that the foreign party had sought an advantage in the litigation upon the explicit premise that the litigation would proceed to trial in the absence of a settlement. Accepting (without deciding) that that was a sufficient and relevant statement of principle, the conduct of Comandate Marine here does not amount to this. Taken together, and in particular in the context of the conduct of Comandate Marine's London solicitors, it cannot be said that Comandate Marine had acted on the explicit and unequivocal premise that the in rem claim would proceed to trial in this Court in the absence of settlement.
96 In the same way and for the same reasons, the conduct of Comandate Marine as a whole could not be said to have reflected an election or choice to get some advantage to which it would not otherwise be entitled without proceeding against Pan on the in personam claim and abandoning the arbitration: Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 at 326. Nor could that conduct as a whole be seen to have evinced an abandonment of the right to insist on arbitration in circumstances where the occasion for that choice to be made once and for all had not arisen: Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 at 41-42.
97 Pan argued that there was no reservation revealed about the nature of the act by Comandate Marine. No one said that a mistake was made in failing to endorse the writ with the claim for a stay under s 29 of the Admiralty Act. I do not think that that is the correct perspective. A step was taken which, in the context of s 29 and of the clearly stated position of Comandate Marine, was equivocal. It was challenged. It was found to be misconceived. No course of conduct inconsistent with one which insisted on arbitration had yet been evinced.
98 Cases to the effect that a claimant by bringing proceedings submits to the jurisdiction of the court including to any cross-claim do not advance the position of Pan. If, in all the circumstances, the bringing of the abortive in rem claim was not a once and for all choice of inconsistent rights or was not the unequivocal embarking on a course inconsistent with ever insisting on arbitration, these cases of personal presence and amenability to the court's process do not take the matter any further.
99 All the above has proceeded on the basis put forward by Pan that the commencement of the action in rem against Boomerang I can be taken as the full equivalent of an action between Comandate Marine and Pan. That rests on the assumption that the action in rem when filed was an action between Comandate Marine and Pan. This is not correct, though at least since 1998 in England it has the support of the House of Lords in Republic of India v India Steamship Co Ltd (No 2) (The 'Indian Grace') [1998] AC 878, which was relied upon by Pan in this context.
100 In The 'Indian Grace' Lord Steyn (with whom Lord Browne-Wilkinson, Lord Hoffmann, Lord Cooke of Thorndon and Lord Hope of Craighead agreed) concluded that the notion of an action against an inanimate object was a fiction which had outlived its useful life. The action in rem, he said, should be recognised for what it is, an action between the plaintiff and, in the language of the Admiralty Act, the relevant person. It was said that this was the position prior to any appearance by the relevant person.
101 The 'Indian Grace' concerned a cargo of munitions from Sweden to India on board Indian Grace. A fire occurred on the voyage which was extinguished with water. Some of the cargo was jettisoned. The plaintiffs (the cargo interests) notified two claims to the defendant (carrier) - a large claim for total loss of cargo in no 3 hold due to damage to the cargo and a small short delivery claim for the jettisoned cargo. A small in personam claim was made in a court in Cochin for the jettisoned cargo. Judgment was entered. A writ in rem was issued in London in respect of the total loss of cargo in no 3 hold, and served on a sister ship of the carrying vessel. The House of Lords held that the in rem proceedings were barred, falling within s 34 of the Civil Jurisdiction and Judgments Act 1982 (UK) which was in the following terms:
"No proceedings may be brought by a person in England and Wales or Northern Ireland on a cause of action in respect of which a judgment has been given in his favour in proceedings between the same parties, or their privies, in a court in another part of the United Kingdom or in a court of an overseas country, unless that judgment is not enforceable or entitled to recognition in England or, as the case may be, in Northern Ireland."
[emphasis added]
102 The question before the House of Lords was whether the English Admiralty action in rem was brought against the same parties as those to the action in personam in Cochin for the purposes s 34 of the above Act. The House of Lords answered the question in the affirmative. Lord Steyn concluded at 913 that an action in rem is an action against the owners of the ship from the moment the Court is seized with jurisdiction. (As to whether this time is the time of filing, or serving, the writ, see The 'Monica S' [1968] P 741 and Tisand Pty Ltd v The Owners of the Ship MV 'Cape Moreton' (Ex Freya) (2005) 143 FCR 43 at 71 [107].) In reaching that conclusion, Lord Steyn discussed the nature of the action in rem and rejected the view, which can be said to have been orthodoxy for over a century, that although the two actions may involve the same cause of action they are between different parties, at least until an appearance is filed by the equivalent of a relevant person.
103 The case was one capable of being disposed of by reference solely to the proper construction of the statutory provision in question. This is how the Court of Appeal approached the matter: see [1998] AC 878 at 893-96. This was how the Court of Appeal in Singapore in Kuo Fen Ching v Dauphin Offshore Engineering & Trading Pte Ltd [1999] 3 SLR 721 distinguished The 'Indian Grace', saying the following at 728 [24]:
"The portions of the House of Lords judgment relied on by the appellants [dealing with the nature of Admiralty in rem proceedings] were theoretical expositions on the nature of in rem actions and did not constitute the ratio. Moreover, the comments were due to the specific context of the facts in the case."
104 Lord Steyn came to the view that he did referred to above for three reasons: (1) the dominance of the so-called procedural theory as an explanation for the action in rem over the so-called personification theory; (2) the effect of various sovereign immunity cases; and (3) what were said to be developments by the Privy Council in The 'August 8' [1983] 2 AC 450, the Court of Appeal in The 'Deichland' [1990] 1 QB 361 and the European Court of Justice in The 'Maciej Rataj' [1995] 1 Lloyd's Rep 302.
105 The utmost respect, of course, must be paid to the reasoning of such an eminent court; and the need for consistent doctrine in international shipping law so far as is possible must be recognised. Giving the fullest weight possible to those considerations, I do not think that it is correct to say that before an owner or demise charterer who is a relevant person files an appearance and submits personally to the jurisdiction of the court, the action in rem is other than against the ship. In my respectful view, the three reasons given by Lord Steyn do not warrant the conclusion which he drew. Ultimately, for Australia, the answer is to be given by an understanding of the Admiralty Act in the context in which it appears. In this task, the name of the theory explaining the action in rem is of little utility and a debate as to the ascendancy or vindication of one theory over another is likely to misdirect analysis. At the outset, I should acknowledge the assistance from the notes of Professor Rose and Mr Teare in [1998] Lloyd's Maritime and Commercial Law Quarterly 27 and 33 and from the reasons of Young J in The 'Irina Zharkikh and Ksenia Zharkikh' [2001] 2 NZLR 801. I would also preface the following remarks by stating that I agree with the reasons of Clarke J (as his Lordship then was) in The 'Indian Grace' [1994] 2 Lloyd's Rep 331 at 349-54. His Lordhip's reasons correctly, in my respectful view, set out the nature of the Admiralty action in rem and correctly state the legal context against which the Admiralty Act should be read.
106 The Admiralty Act was the product of a careful and scholarly report by the Australian Law Reform Commission (Report No 33) (the "ALRC Report"). The nature of the action in rem provided for in Part III of the Admiralty Act is to be viewed against the background of Admiralty jurisdiction up to 1988 and the terms of the Admiralty Act are to be construed in that context: see generally The 'Cape Moreton' at [59]-[65]. The ALRC Report at [14]-[17] deals briefly, but succinctly, with the nature of the action in rem and the respective competing theories underpinning it. I do not intend to set out this well-known background other than to say that the arrest of a ship, in particular when based on a statutory ground separate from a maritime lien, became seen as a device to compel appearance of the owner. The liability personally of the owner to the full extent of the claim and not limited to the value of the res, if the owner did so appear, was laid down by Sir Francis Jeune in The 'Dictator' [1892] P 304and developed in The 'Gemma' [1899] P 285, The 'Dupleix' [1912] P 8 and the later cases. This was a development not without controversy: see Wiswall, F The Development of Admiralty Jurisdiction and Practice Since 1800 (Cambridge University Press 1970) at 131-32 and 168-84. Only 40 years earlier, the Privy Council had appeared to ground all Admiralty in rem actions in the maritime lien and the theory of the ship as the wrongdoing instrument: The 'Bold Buccleugh' (1851) 7 Moo PC 267, 13 ER 884 limiting, it was thought, liability on such actions to the res itself, and its value. This appeared to state English Admiralty law in a manner similar to the United States: The 'Little Charles' 26 F Cas 979 (1818), The 'Palmiyra' 25 US 1 (1827), The 'Nestor' 18 F Cas 9 (1831), The Brig 'Malek Adhel' 43 US 210 (1844) and The 'Young Mechanic' 30 F Cas 873 (1855) and to found it upon a theory of the personification of the ship.
107 As discussed in The 'Cape Moreton' at 68-73 [100]-[118] English and Australian Admiralty jurisdiction has been heavily influenced by the procedural theory, rather than by the personification theory. It is unnecessary to deal further with the two theories and the variations thereof. For present purposes, it can be accepted that, to a significant degree, the procedural theory underpins the Admiralty Act; but to say as much does not solve all issues in understanding the nature of the action in rem.
108 It is necessary to identify some fundamental issues about the action in rem, which before The 'Indian Grace' appeared to have been settled, although, in fairness, comments such as those by Brandon J in The 'Conoco Britannia' [1972] 2 QB 543 at 555 foreshadowed some re-evaluation of the nature of the action in rem. (I will limit myself to dealing with actions in rem against the ship and ignore questions of other property. Also, the authorities given are not exhaustive.) The claim is served upon the ship. The ship must be in the geographical jurisdiction of the court. Service ex juris is not permitted. Once the action is commenced a change in ownership will be ineffective to prevent the action proceeding against the ship: The 'Monica S' [1968] P 741 and The 'Cape Moreton'. This obtains whether the claim underlying the action is a maritime lien: s15 of the Admiralty Act or a maritime claim sufficient to ground an action in rem: ss 16, 17, 18 and 19 of the Admiralty Act. Subject to the extension of surrogate or sister ship arrest, the action in rem lies only against the ship in connection with which the claim arises: The 'Beldis' [1936] P 51, and see the word "concerning" in ss 16, 17, 18 and 19 and the words "in respect of" in s 15.
109 Once an in rem claim has been served on the ship, an appearance may be filed under Rule 23 by someone who has a relationship with the ship or property against which the action in rem has been commenced. Certainly if the party who files a notice of appearance is a relevant person, the consequence is that, as Gibbs J said in Caltex Oil v The Dredge 'Willemstad', the action proceeds as if it were an action in personam (without ceasing to be an action in rem) against that person. Once a relevant person files an appearance, the plaintiff will file a statement of claim "on each party who has entered an appearance" and the relevant person becomes liable to have judgment entered against it personally and to the full extent of the claim, not limited by the value of the ship: Caltex Oil v The Dredge 'Willemstad'; The 'Dictator'; The 'Gemma'; The 'Dupleix'; and The 'Banco' [1971] P 137. If a person files a notice of appearance who is not a relevant person, eg a mortgagee, demise charterer (where the claim is against the owner) or an owner to whom the ship has been transferred after the commencement of the writ, there is no call to characterise the action as other than in rem. If the relevant person does not appear, the claimant is limited to the res, which is available to the claimant as one of all maritime claimants who may come in to assert their rights over the ship or the funds from the sale: The 'Banco'; The 'Queen of the South' [1968] P 449; The 'Leoborg (No 2)' [1963] 2 Lloyd's Rep 441; and The 'Silia' [1981] 2 Lloyd's Rep 534. In these circumstances, it can be taken that the relevant person has made a choice not to come in and defend any interest in the ship which would have come at the price of submitting itself to personal liability for the full amount of the claim. Indeed, there may be no other party who is interested in defending the claim, in which case the plaintiff will proceed against the ship, obtain judgment against the ship, have the ship sold under court process and, after payment of the costs and expenses of the arrest and sale, take its share of the proceeds in competition with other maritime claimants on the ship.
110 A cause of action in rem does not merge in a judgment in personam: The 'Cella' (1888) 13 PD 82 at 85; and The 'Rena K' [1979] QB 377 at 405-406.
111 These attributes of the action acting together lie at the heart of the operation of the procedural theory. The owner can be forced to the jurisdiction to protect its asset. Once there, it is liable in full to the claim, its liability not limited by the value of the ship. If it does not wish to face that prospect, its asset, the ship, faces condemnation for the claim and the claims of other maritime claimants. To the extent that the in rem claimant remains unsatisfied as to the full amount of the claim it is not debarred from proceeding in personam against the owner personally. In this way, the procedural theory relies for its effective operation upon the reality of the claim against the ship being separate and distinct from the claim in personam.
112 Actions in rem under Part III can be based on maritime liens, proprietary maritime claims and general maritime claims. The phrases "proprietary maritime claim", "general maritime claim" and "maritime claim" are defined in s 4 of the Admiralty Act. There is no definition of a maritime lien in the Admiralty Act. It is a creature of maritime law and is generally described by reference to cases such as The 'Bold Buccleugh' (1851) 7 Moo PC 267 at 284-85, 13 ER 884 at 890-91 as a non-possessory claim or privilege upon a ship carried into effect by legal process by in rem action. It is inchoate from the time of the events giving rise to it, attaching to the ship, travelling with the ship into anyone's possession (even a bona fide purchaser for value without notice, except a purchaser at an Admiralty Court sale) and perfected by legal process relating back to first attachment. See also The 'Two Ellens' (1872) LR 4 PC 161 at 169; The 'Ripon City' [1897] P 226 at 242; The 'Tolten' [1946] P 135 at 150; and The 'Tervaete' [1922] P 259 at 273; and Thomas, DR Maritime Liens (Stevens 1980) at [10]-[13]. Under The 'Halcyon Isle' [1981] AC 221 maritime liens are characterised as procedural. Some legal systems view the matter differently.
113 As can be seen from comparing ss 15 and 16 of the Admiralty Act with ss 17 to 19 of the Admiralty Act, an action in rem on a maritime lien or a proprietary maritime does not depend on the claimant proving the requisite relationships between that relevant person and the ship at the respective times in paragraphs (a) and (b) of ss 17, 18 and 19.
114 The types of maritime lien are set out non-exhaustively in s 15, but see The 'Acrux' [1965] P 391, The 'Halcyon Isle' and Fournier v The Ship 'Margaret Z' [1999] 3 NZLR 111 at [22]-[23] as to the constraints on expansion of liens by judicial exposition.
115 Apart from how they arise, their relevance to priorities between claimants and the lack of a requirement to prove the connecting factors in paragraphs (a) and (b) in ss 17, 18 and 19, maritime liens do not give rise to a different kind of in rem action from one based on a maritime claim, whether proprietary or general. There is no suggestion in the Admiralty Act that the rights to proceed against a ship, provided for exclusively under statute: see s 14 of the Admiralty Act, are of a different kind or character, if based on a maritime lien rather than if based on a maritime claim.
116 The conclusion drawn by Lord Steyn in The 'Indian Grace' that the dominance of the procedural theory leads to the conclusion that the action in rem should be viewed from its commencement, prior to appearance, as always an action between the parties to the cause of action underlying it (the parties to the in personam claim) ignores critical aspects of the ship's responsibility for maritime liens and maritime claims in certain circumstances and the practical operation of the procedural theory itself. That the procedural theory can be seen as a dominant theory in English and Australian Admiralty law can be accepted for the purpose of debate (the correctness of that statement, any relevant qualifications to it and aspects of Lord Steyn's historical analysis need not be debated or analysed). But it is not an all-embracing theory explaining all aspects of the action in rem: see the ALRC Report at [17] and Thomas, DR op cit at [8a]. The place of the maritime lien and the access of the claimant to the ship to enforce it whoever owns the ship, the capacity of the action in rem to continue against the new owner if a sale occurred after commencement of the action, the historical separateness of the judgments on the action in rem and in personam, the restriction in the claimant's rights to the value of the res, the coming in by others to defend their interests in the ship and the coming in to share in the fund by other claimants interested in the ship all point to the reality of the claim against the ship.
117 Lord Steyn simply set maritime liens to one side. He did not deal with The 'Monica S' and the statutory action in rem continuing against the ship after a sale to a new owner. He denied, however, the legitimacy of treating judgments in rem and in personam as separate. So to find was contrary to established authority for over a century. Lord Steyn, wrongly, as Young J pointed out in The 'Irina Zharkikh', said that all the cases about non-merger of in personam and in rem judgments were lien cases. They were not. The 'Cella' (1888) 13 PD 82 and The 'Rena K' [1979] QB 377 at 405-406 involved a statutory right of action in rem. With respect, the character of the statutory action cannot be assessed by putting the maritime lien to one side. The action in rem is the essential procedural perfection of the lien which attaches from the time of the very acts which give rise to it, in circumstances where the person liable on any claim, eg salvage or bottomry, might not be the current owner.
118 Further, to assimilate judgments resulting from the actions in rem and in personam is to debilitate the utility of the action in rem. The force of the procedural theory is to bring the owner liable on the action to court to appear and expose itself to the claim for its full amount. If the claimant has to bring the action in rem knowing that this is its one action against the defendant owner, it may risk disaster in proceeding in rem. If the owner does not appear and if the claimant proceeds against the ship, it may gain little from the action (even if it has a strong case). Other claimants may come in - mortgagees, lienees, other statutory claimants. None of these, or at least the amount each is owed, would have been apparent to the claimant before judgment. Yet, having gone to judgment in rem, the claimant is precluded from proceeding again in personam because really it has, according to The 'Indian Grace', already had its opportunity against he defendant owner in personam by the in rem action. There has been no personal submission by the relevant person and so it is difficult to see how the plaintiff can somehow enforce the in rem judgment against other assets of the relevant person. If this is the position, there is a clear opportunity for a party liable for a maritime claim to collude with others to undermine entirely the worth of the underlying cause of action. The action in rem is a necessary tool of international maritime commerce for the recovery of just claims. To treat it as the equivalent of the in personam claim risks making it a dangerous lottery, thereby diminishing its practical value.
119 The differences between the in rem and in personam actions lay at the heart of Admiralty practice. They gave utility to the Admiralty procedure. They gave efficacy to the procedural theory itself. The action being against the ship inhered in the law up to 1988, and was recognised by the Admiralty Act. The action in rem when commenced is not against the relevant person. It is against the ship. The position after a notice of appearance is filed by a relevant person is as I have expressed it.
120 In my respectful view, the procedural theory is an inadequate foundation upon which to conclude that the in rem action is always an action to which the owner or demise charterer as relevant person is a party. To the contrary, it supports the conclusion that the action in rem is against the ship.
121 The sovereign immunity cases referred to by Lord Steyn (The 'Tervaete' [1922] P 259, The 'Jupiter' [1924] P 236, The 'Cristina' [1938] AC 485 and The 'Parlement Belge' (1880) 5 PD 197) do not, in my view, require a different conclusion. In none of these cases was there any challenge to the proposition that the owner did not become a party to the proceedings until it entered an appearance. Undoubtedly these cases prevented an in rem action proceeding against a ship owned by a foreign sovereign. The notion that the sovereign's interests were being sufficiently affected for the doctrine of sovereign immunity to apply can be readily accepted. Lord Wright's view in The 'Cristina' at 505 that the sovereign was called upon to sacrifice either his property or his independence explains the notion of being "impleaded". It provides, however, no logical foundation to say that the sovereign is a party to the in rem action before an appearance. As Mr Teare points out in [1998] Lloyd's Maritime and Commercial Law Quarterly 33 at 39, in none of the sovereign immunity cases was there any criticism of The 'Dictator', The 'Gemma' and The 'Dupleix' in their stating that the owner became a party only after it entered an appearance. In my respectful view, the views of Clarke J at first instance in The 'Indian Grace' at 354 distinguishing between impleading and the parties to the in rem action before the appearance are correct. These were the views also of Lord Esher MR in The 'Longford' (1888) 14 PD 34 at 37 when he said in relation to The 'Parlement Belge':
"…the most that can be collected from that decision… is that an action in rem is not the same as an action in personam, though it may indirectly affect the owners of or persons interested in the ship"
122 The third reason given by Lord Steyn was what he saw as "further developments" in The 'August 8', The 'Deichland' and The 'Maciej Rataj'.
123 In The 'August 8' Lord Brandon of Oakbrook said at 456:
"...By the law of England, once a defendant in an admiralty action in rem has entered an appearance in such action, he has submitted himself personally to the jurisdiction of the English Admiralty Court, and the result of that is that , from then on, the action continues against him not only as an action in rem but also as an action in personam: The Gemma [1899] P. 285, 292 per A. L. Smith L.J."
[emphasis given by Lord Steyn]
This had been the case since The 'Dictator'. It accords with the proposition and, indeed embodies the proposition, that until the notice of appearance by the putatively liable defendant, the action in rem is only an action against the ship (which it continues to be thereafter, whilst also proceeding as if it were an action in personam also). No support is given by this case for Lord Steyn's view that before an appearance is filed the owner is a party to the action.
124 The 'Deichland' concerned Article 2 of the 1968 Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. An action in rem was commenced and served on the ship. Sheen J rejected a motion challenging jurisdiction based on Article 2 (made part of English domestic law) which was in the following terms:
"Subject to the provisions of this Convention, persons domiciled in a contracting state shall, whatever their nationality, be sued in the courts of that state."
Sheen J found the action was in rem and not against the party domiciled in Germany. The Court of Appeal allowed the appeal. It did so on the proper construction of the article. It did not do so on the basis of some change to the fundamental character of the in rem writ before appearance. See in particular the reasons of Neill LJ at 373-74 and Sir Denys Buckley at 389. Nowhere in The 'Deichland' was there any expression of views that the analysis of the action in rem expounded in The 'Dictator' should be departed from.
125 The 'Maciej Rataj' concerned the operation of Article 21 of the Brussels Convention and whether an action in rem and an action in personam are between the same person for that provision. The interpretation of Article 21 proceeded independently of the distinction drawn in English law between the two actions. The case did not deal with the true nature of the Admiralty in rem action. It is therefore no support for a proposition that there should be a change of the law as to that matter.
126 The ALRC Report and in particular chapters 8 and 9 worked on the basis of the separateness of the action in rem and the action in personam and of the former being an action against the ship.
127 The terms of Rule 15(1) referred to earlier requiring specification of a relevant person in the writ "as a defendant" do not bring about a change to the nature of the proceeding before appearance. Plainly this requirement is to identify who will be an in personam defendant if an appearance is filed.
128 Until the High Court of Australia says otherwise, the law of Australia is that the action in rem, at least prior to the unconditional appearance of a relevant person, is an action against the ship, not the owner or demise charterer of the ship: Aichhorn & Co KG v The Ship MV ' Talabot' at 454-56 (per Menzies, Gibbs and Mason JJ); and Caltex Oil v The Dredge 'Willemstad' at 538-39 (per Gibbs J) citing The 'Dictator', The 'Gemma', The 'Dupleix', The 'Banco' at 151, The 'Broadmayne' [1916] P 64 at 77 and The 'Conoco Britannia' at 555. After the appearance, it continues as an action in rem and also as if it were an action in personam against the relevant person who appears.
129 The position is conveniently expressed by Bankes LJ in The 'Broadmayne' at 77, specifically cited by Gibbs J in Caltex Oil v The Dredge 'Willemstad' at 538, as follows:
"The position is, I think, quite clearly indicated in the passage from Clerke [Praxis Curiae Admiralitatis], cited with approval by Jeune J (sic). in The Dictator … where the writer says that after appearance the case proceeds 'ut in actione instituta contra personam debitoris' - that is to say, that the action is to proceed as if, but only as if, it was an action in personam. The advantage of the action being an action in rem still remains in the sense that, should the exceptional occasion arise, the Court in a proper case would no doubt still have jurisdiction to order the arrest of the vessel."
130 Apart from any other reason why the filing of the writ was not an election or waiver or abandonment depriving Comandate Marine of the entitlement to continue with the arbitration, it was not the commencement of legal proceedings against Pan.
131 There was, in my view, no election between inconsistent rights, no abandonment (express or implied) of the arbitration and no unequivocal acceptance of any repudiation by Pan, assuming one to have been demonstrated.
132 Though the issues raised by grounds 1 and 2 of the notice of contention that Comandate Marine accepted a repudiatory conduct or anticipatory breach by Pan (ground 1) and that the parties reached an implied agreement to abandon the arbitration agreement (ground 2) can be understood in the context of the evidence that was led, the relevant parts of which I have set out, the hearing was not directed to these issues. Objection was taken to these issues being raised on the basis that the course of the hearing may have been different had these issues been raised. It cannot be concluded that there was a full examination of all the facts about the period from early June 2006 onwards with these two additional issues in mind. In that context, I am not prepared to conclude that the raising of these issues now would not work an injustice: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424, at [37] and [38]. Therefore, I would not permit Pan to rely on grounds 1 and 2 of the notice of contention. If that is not the correct approach, on the basis of the material before the Court, for the reasons that I have given, I would reject both grounds.