Condor Fresh Pty Limited v Pacific International Lines

SC DERRINGTON J: 1 This application is for leave pursuant to r 10.43 of the Federal Court Rules 2011 (Cth) to serve the Originating Application in this matter on the defendant, Pacific International Lines (Pte) Ltd (PIL), in a foreign country - the Republic of Singapore. 2 On 17 June 2020, Condor Fresh Pty Limited (Condor) commenced proceedings in this Court against PIL for damages totalling $255,580.11 for alleged breaches of a series of contracts of carriage for containerised goods and for alleged breaches of the Australian Consumer Law. 3 By the Concise Statement, Condor alleges that on or about March 2020, it contracted with PIL for the transportation of grapes in 7 separate refrigerated containers from Melbourne to Kaohsiung, Taiwan. The contracts specified that the carriage temperature be 0°C and that the vent setting on each container be set at 10 CMH. 4 It is also alleged that Condor agreed for PIL to provide an additional service in respect of all the containers - Intransit Cold Treatment (ICT), for which an additional fee of USD1000.00 per container was paid. 5 It is alleged that of the 7 shipments the subject of the contracts of carriage, 3 containers experienced rise in the relevant container supply air and/or return air temperatures when the cargo was in the care of PIL and did not successfully satisfy ICT protocols, resulting in damage to the cargo and consequent loss to Condor. 6 Condor asserts that PIL: (a) failed to exercise due diligence in providing the ICT service in breach of its contracted obligation; and/or (b) in contracting to provide the ICT service as it did, it engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in breach of s 18 of the Australian Consumer Law; and/or (c) in not informing Condor when the temperature probe readings exceeded protocol limits and/or in not providing container information and temperature records requested by Condor, engaged in conduct that was unconscionable in breach of ss 21 and 22 of the Australian Consumer Law; and/or (d) failed in its duty to exercise due diligence to safely receive, carry, preserve and deliver the cargo pursuant to the contract of carriage. 7 The service of an originating process of this Court on persons in foreign countries is only effective if that service has complied with r 10.43(1) of the Federal Court Rules 2011 (Cth). Pursuant to r 10.43(2), a party may apply to the Court for leave to serve the process on a person in a foreign country in accordance with a convention, the Hague Convention, or the law of a foreign country. By r 10.43(4), the Court will only grant leave if it is satisfied that: (a) the Court has jurisdiction in the proceeding; and (b) the proceeding is of a kind mentioned in r 10.42; and (c) the party has a prima facie case for all or any of the relief claimed in the proceedings.

Federal Court's jurisdiction 8 The Federal Court of Australia has jurisdiction in relation to certain proceedings pursuant to the provisions of the Admiralty Act 1988 (Cth). Relevantly, s 9 of that Act confers jurisdiction on the Court in respect of in personam actions on a maritime claim. Section 4(1) defines "maritime claim" as including "a general maritime claim" and, by s 4(3)(e), a claim for loss of, or damage to, goods carried by a ship is a general maritime claim. 9 The Federal Court of Australia also has jurisdiction in relation to a claim brought under the Australian Consumer Law pursuant to s 138 of the Competition and Consumer Act 2010 (Cth). 10 It follows that Condor's action in this matter is one within the jurisdiction of this Court, it being an in personam action on a general maritime claim and a claim arising out of alleged contraventions of the Australian Consumer Law. 11 There is no doubt that the action brought by Condor is of a kind mentioned in r 10.42 which includes proceedings seeking any relief or remedy under an Act or proceedings based on a cause of action in Australia. In this case, the proceedings seek damages against PIL on the basis of a contravention of an Act seeking relief in relation to damage suffered in Australia and is also a proceeding in relation to a contract that was allegedly made in Australia, by or through an agent of PIL who carries on business in Australia, and which is governed by the law of the Commonwealth.

Does a prima facie case exist? 12 The principles applicable to the predecessor provision to r 10.43(4)(c) (O 8 r 2(2)(c)) were considered by the Full Court in Ho v Akai Pty Ltd (in liq) [2006] FCAFC 159; 247 FCR 205. The Full Court held, at [10]: As has been observed on many occasions, the prima facie case requirement has to be met at the outset, usually on an ex parte basis, and without the advantage of discovery and other procedural aids to the making out of the case: see eg Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390. It "should not call for a substantial inquiry": WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 476; see also Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 at 549. For present purposes it is sufficient to say that a prima facie case for relief is made out if, on the material before the Court, inferences are open which if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110. Or, to out the matter more prosaically as Lee J did in Century Insurance Ltd (in prov liq) v New Zealand Guardian Trust Ltd [1996] FCA 376: What the Court must determine is whether the case made out on the material presented shows that a controversy exists between the parties that warrants the use of the Court's processed to resolve it and whether causing a proposed respondent to be involved in litigation in the Court in Australia is justified. 13 These principles are equally applicable to the current provision: Tiger Yacht Management Ltd v Morris [2019] FCAFC 8; 268 FCR 548 [45]; Israel Discount Bank Ltd v ACN 078 272 867 Pty Ltd (in liq) (formerly Advance Finances Pty Ltd) [2019] FCAFC 90; 367 ALR 71 [47]. 14 The requirement that there be a prima facie case demonstrated pertains to "all or any" of the relief claimed in the proceeding. It is not necessary to demonstrate merit in all of the claims made in the proceeding: Tiger Yacht Management [45]. 15 Condor has filed and relied on two affidavits of Mr Shanta Ambrose Rajadurai filed on 26 June 2020 and 9 July 2020, an affidavit of Mr Trent Paola filed on 13 July 2020, and an affidavit of Mr Jeffrey Lennon filed on 13 July 2020. 16 Condor's submissions, and the affidavits in support, are directed at establishing a prima facie case in respect of the claims said to arise out of breaches of the contracts of carriage and breaches of the contracts to provide ICT service. Condor adduced no evidence, and made no submissions, in relation to the allegations of misleading or deceptive conduct or unconscionable conduct. 17 Mr Paola is the Director and sole shareholder of Condor. He deposes to the circumstances of Condor entering into three contracts for the sale of three consignments of fresh table grapes to three customers in Taiwan. His affidavit exhibits the commercial invoices in respect of those contracts. 18 Mr Paola deposes to the circumstances of Condor entering into seven contracts of carriage with PIL for seven consignments of grapes from Melbourne to Kaohsiung under refrigerated conditions. He deposes that four of the shipments were delivered without incident but that the three shipments the subject of these proceedings were not delivered. Mr Paola also deposes that, in respect of each consignment, Condor and PIL entered into a contract for PIL to provide an ICT service at an additional fee. He says that the contracts of carriage and the ICT contracts were negotiated on behalf of Condor by Freight Logistics Pty Ltd (FL) with PIL's agent, Pacific Asia Express Pty Ltd (PAE). 19 Mr Lennon is the General Manager at FL who deposes to negotiating and managing the contracts of carriage and the ICT contracts on behalf of Condor. His affidavit exhibits the sea carriage documents in respect of the three cargoes the subject of these proceedings, the booking receipt notes evidencing the ICT contracts and three Export Receival Advice forms issued on delivery into the custody of the carrier confirming "Cold Treatment Reefer". Mr Lennon's affidavit provides some evidence of the terms of the ICT contracts, in emails from PAE exhibited to his affidavit, including that the service charge included the supply and installation of the probes and twice daily monitoring of the reefer temperatures. 20 Mr Lennon deposes to the fluctuations in temperatures within the containers during the voyages from Melbourne to Kaohsiung and spikes in temperatures which breached the ICT protocol. His affidavit adduces a significant amount of evidence, including data logger printouts for each of the containers. His affidavit exhibits two written directions of the Taiwan Bureau of Animal and Plant Health Inspection and Quarantine requiring that containers TGHU9969922 and PCIU6083126 be returned to origin because of non-compliance with cold treatment. In relation to container PCIU6059813, Mr Lennon exhibits conflicting emails from PIL's P&I club as to whether attempts at passing the ICT protocol have been successful. Mr Lennon deposes that PIL has not provided the temperature records by which this could be verified. Mr Lennon deposes that PIL has apparently surrendered the third cargo for disposal to the customs authorities. He exhibits a letter, written in Chinese together with a free hand translation, which was attached to an email sent by PIL's P&I club to Condor on 9 July 2020. 21 Mr Lennon deposes that PAE acknowledged that the ICT protocols in respect of TGHU9969922 and PCIU6083126 had failed and exhibits email exchanges between FL and PAE. 22 Mr Paola deposes, in a general sense at least, to the loss and damage suffered by Condor as a result of the temperature fluctuations and the consequential inability to deliver the three cargoes to the consignees in accordance with the sales contracts by exhibiting emails from Condor to PIL, dated 23 April 2020, 27 April 2020 and 5 May 2020, notifying of Condor's "intention to claim for the financial loss" in respect of each of the shipments. The amount claimed in respect of each of the shipments is apparent from the emails from PIL acknowledging receipt of those communications. It might be observed in passing that those amounts do not appear to credit the amount already paid by the buyers, being 50% of the invoiced sum 7 days after shipment (as deposed to by Mr Paola). An inference is open that the buyers must be refunded those sums. Further, Mr Lennon deposes to Condor having paid additional charges to ship two containers (TGHU9969922 and PCIU6083126) to Hong Kong in an attempt to mitigate its loss. 23 Observations about the facts of this matter or the strength of the applicant's case are made purely on the evidence advanced by Condor, in respect of which PIL has had no opportunity to reply. No concluded view has, or could be, reached at this stage of proceedings about any factual matter which might arise in the future. Nevertheless, the evidence establishes, at least at a prima facie level, that Condor has sustained the loss and damage it claims to have suffered as a consequence of breaches by PIL of the contracts of carriage and the ICT service contracts as alleged in the Concise Statement.

Conclusion on prima facie case 24 It follows that the affidavit material is sufficient to establish the prima facie case required by r 10.43(4).

The requirements of r 10.43(3) 25 An application for leave to serve a person outside of Australia must be accompanied by an affidavit stating: (a) the name of the foreign county where the person is or is likely to be; (b) the proposed method of service; and (c) that the proposed method of services is permitted by a convention, the Hague Convention or the law of a foreign country. 26 Mr Rajadurai deposes that PIL is a company registered in Singapore and which has a registered address in Singapore. The extract from the Singapore Accounting and Corporate Registry is sufficient to satisfy the Court that PIL is or is likely to be in Singapore. 27 Australia and Singapore have no relevant treaty arrangement, nor is Singapore a party to the Hague Convention. The proposed method of service is therefore necessarily through diplomatic channels and Condor proposes that this occur. It appears that what is intended is that service through diplomatic channels be effected via the laws regulating service in Singapore, being Order 65 of the Supreme Court of Judicature Act - Rules of Court 2014.

Conclusion 28 It follows that Condor has satisfied the requirements of r 10.43 in relation to the service of PIL in Singapore. 29 Accordingly, leave will be granted pursuant to r 10.43(2) of the Federal Court Rules 2011 (Cth) to serve Pacific International Lines (Pte) Ltd outside of Australia in the manner identified in the affidavit of Mr Rajadurai of 26 June 2020. Although the Interlocutory Application refers only to service of the Originating Application, the order granting leave will include the Concise Statement, it being the document that must accompany the Originating Application and which must be served with it pursuant to rr 8.05 and 8.06 of the Federal Court Rules 2011 (Cth). I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice SC Derrington.