Guardian Offshore AU Pty Ltd v Saab Seaeye Leopard 1702 Remotely Operated Vehicle Lately On Board The Ship 'Offshore Guardian'

AND: SAAB SEAEYE LEOPARD 1702 REMOTELY OPERATED VEHICLE LATELY ON BOARD THE SHIP 'OFFSHORE GUARDIAN' First Defendant

SAAB SEAEYE LEOPARD 1702 REMOTELY OPERATED VEHICLE AS SURROGATE FOR THE FIRST DEFENDANT Second Defendant

ADMIRALTY MARSHAL WESTERN AUSTRALIA DISTRICT REGISTRY

JUDGE: COLVIN J DATE OF ORDER: 9 MARCH 2020

1. The proceedings be dismissed for want of jurisdiction.
2. The arrest of the second defendant (now described as Saab Seaeye Leopard 1704) be set aside.
3. The arrest warrant issued on 22 January 2020 be set aside.
4. DW Subsea Pty Ltd (ACN 625 188 703) be released from the undertaking given pursuant to r 53 of the Admiralty Rules 1988 (Cth).
5. DW Subsea Pty Ltd shall have no liability in respect of the costs of the Marshal and all such costs shall be met by the plaintiff.
6. The plaintiff do pay the costs of the proceedings including the costs of the interlocutory application dated 17 February 2020, such costs to be assessed if not agreed.
7. The operation of these orders be stayed until noon on 11 March 2020 or further order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 Saab Seaeye Limited manufactures a type of remotely operated underwater vehicle (ROV) known as the Seaeye Leopard. The submersible part of the Seaeye Leopard is 2150 mm long, 1174 mm high and 1160 mm wide. It is described by Saab as having a forward speed of more than 3.5 knots and a payload of 205 kg. It has a polypropylene and stainless steel chassis 'designed to maximise free water flow through the ROV'. It has buoyancy modules and is propelled by a number of thrusters that provide 6-axis control and active vehicle stability. 2 The ROV is fitted with equipment that can be remotely operated to undertake activities at depths of up to 2000 metres below the sea surface. Its physical appearance lacks the attributes that would usually be associated with a structure described as a ship or vessel as a matter of ordinary parlance. The ROV is not encased within an outer rigid structure. The equipment forming part of the ROV can be seen through the chassis. 3 The ROV is deployed from a ship (main vessel). It is designed to be lowered below the surface within a launch and recovery system (LARS). The LARS comprises equipment in a frame that holds the ROV in a manner the enables both the LARS and the ROV to be winched underwater. The LARS remains connected by an umbilical to a surface vessel which provides a power source, tether and control mechanisms, known as a tether management system (TMS). Once it has been lowered to the desired depth, the ROV can be manoeuvred away from the LARS for distances of up to 150 metres. However, the ROV remains tethered to the LARS. 4 Tools and equipment on the ROV can be customised to meet particular requirements. 5 It is common ground that, at all material times, there were two Seaeye Leopard ROVs in the possession of Ford Commercial Diving Solutions Pty Ltd trading as Dive Works Subsea Solutions (FCDS). It offered the use of the ROVs and associated services to its clients. On its website, it described the ROVs in the following terms: The Seaeye Leopard is designed to offer an exceptionally powerful electric workclass ROV in a compact chassis. The Seaeye Leopard produces an impressive half tonne of forward thrust, with fifty percent more payload, three times the tooling power and double the depth rating, whilst maintaining the same deck footprint. Equipped with Seaeye's iCONTM intelligent control system, this 2000m work class ROV benefits from an enhanced user interface, simple network architecture, exceptional handling and power with advanced autopilots including pitch and roll stabilisation, built in diagnostics, redundancy and remote internet access for upgrades and technical support. 6 When deployed, the Seaeye Leopard ROVs are operated remotely. The evidence is to the effect that they are operated by two pilots, one of whom controls the ROV and the other controls the equipment on the ROV such as lighting, cameras, probes, water jets and other tools. The pilots remain in a control room on the main vessel.

Commencement of proceedings by Guardian 7 On 10 September 2019, Guardian Offshore AU Pty Ltd (Guardian) commenced proceedings seeking to invoke the admiralty jurisdiction of this Court. The writ named two Seaeye Leopard ROVs as in rem defendants. The first defendant was described as: Saab Seaeye Leopard 1702 Remotely Operated Vehicle lately on board the Ship 'Offshore Guardian' (the Ship) The second defendant was described as: Saab Seaeye Leopard 1702 Remotely Operated Vehicle, as surrogate for the Ship 8 However, it is now claimed that there was only one vessel which was identified by the number '1702'. It is said that the second ROV was identified by the number '1704'. 9 The writ describes a claim against FCDS as the basis for invoking the admiralty jurisdiction. No issue is taken as to whether the claim is a general maritime claim and so much may be accepted for present purposes.

The arrest 10 On 22 January 2020, Guardian requested the issue of a warrant for the arrest of 'Saab Seaeye Leopard 1702 Remotely Operated Vehicle'. A warrant issued and there was an arrest of a Saab Seaeye ROV at Welshpool, Western Australia. The affidavit of service sworn by the Admiralty Marshal states that service had been effected on 'the Defendant' and it was done 'by securely affixing a sealed copy to a conspicuous part of the Defendant, namely the front section of the vehicle frame'. 11 The Marshal gave oral evidence to the effect that when the arrest warrant was attached to the ROV there was a heavy tarpaulin that covered the vehicle. It was drawn back to a limited extent to identify the vehicle. From photographs in evidence the name 'Seaeye Leopard' is evident from the point where the arrest warrant was affixed. However, what was obscured was the marking 'LARS LPD 1704' on the side of the equipment beneath the tarpaulin.

Application to dismiss 12 On 17 February 2020, DW Subsea Pty Ltd (DWS) brought an interlocutory application to dismiss the proceedings for want of jurisdiction and for the warrant of arrest to be set aside, alternatively for the proceedings to be summarily dismissed. It also sought to be released from its undertaking and for Guardian to meet all of the costs of the arrest and of the proceedings. DWS claimed to be the owner of both of the Seaeye Leopard ROVs. 13 The parties agreed on programming orders for affidavits and submissions and the application was heard urgently. DWS makes three claims. First, it says that the arrested ROV is not the ship named in the arrest warrant. Second, it says that FCDS is not and never has been the owner of the ship named in the writ. Third, it says that the subject matter of the proceedings, being a Seaeye Leopard ROV, is not a ship and therefore the arrest was made without jurisdiction. 14 Guardian seeks to meet the first claim by demonstrating that the arrested ROV is the one numbered 1702, alternatively it says that if ROV 1704 has been arrested then the arrest was intended to be supported on the basis that it is a surrogate and any error can be corrected by an amendment to the writ as well as the warrant of arrest to correct a mistake in the naming of a party. 15 As to the second claim, it says that there is a triable issue as to whether at all material times FCDS has been the true owner of the arrested ROV. If that claim is not accepted then it says that the proceedings should not be dismissed because the evidence discloses a proper basis for a claim against the first defendant, being ROV 1702 because FCDS had possession and control of the ROV and at the relevant time was the owner or demise charterer. 16 As to the third claim, it says that an ROV with the characteristics of a Seaeye Leopard is a vessel of a kind used in navigation by water and therefore within the statutory definition of 'ship' in the Admiralty Act 1988 (Cth). 17 Guardian accepts, as it must, that to the extent that it is claimed that this Court lacks jurisdiction then it must establish on balance the jurisdictional facts required to support the existence of jurisdiction: Owners of the Ship 'Shin Kobe Maru' v Empire Shipping Company Inc [1994] HCA 54; (1994) 181 CLR 404 at 426.

Evidence as to the identity of the arrested ROV 18 In correspondence between solicitors after proceedings were commenced in this Court, but before the arrest, the solicitors acting for Guardian described the proceedings in terms that made clear that they understood that the in rem jurisdiction had been invoked as to two Seaeye Leopard ROVs. In a letter dated 1 October 2019, Guardian's solicitors sought undertakings from FCDS that included an undertaking that 'it continues to own both work-class ROVs (the Seaeye Leopard model) that are referred to on its website'. In evidence was material from a website at the domain address 'diveworks.com.au' that referred to Dive Works as the owner of the ROVs. The letter from Guardian's solicitors was met with a response on the same day to the effect that FCDS 'does not own the work-class ROVs the subject of your client's writ'. In a further letter dated 2 October 2019, the solicitors for Guardian sought documents 'pertaining to title to the ROVs'. The letter also made the point that in rem proceedings could be brought on the basis of a claim that FCDS had 'possession and control of the ROVs in the manner of an owner pro hac vice'. Solicitors for FCDS responded by saying that Guardian 'cannot arrest either of the ROVs'. 19 On 11 October 2019 (about a month after proceedings had been commenced), the solicitors for Guardian put the matter squarely in the context of the two named defendants on the writ as follows: As against the first defendant, our client relies on s 17, or alternatively s 18, of the Act. As against the second defendant, s 19. Both defendants are the work-class ROVs of the Saab Seaeye Leopard model that our client says that your client owned, or alternatively, demise chartered at the relevant times. The first was the ROV on board our client's vessel, Offshore Guardian, until around February or March 2019, and the second is a surrogate for the first. 20 A week after the arrest, solicitors acting for both FCDS and DWS made the following claim in correspondence addressed to solicitors acting for Guardian: The Arrest Warrant issued by the Court identifies the Saab Seaeye Leopard 1702 Remotely Operated Vehicle (ROV1702). ROV1704 was arrested, which is not the remotely operated vehicle (ROV) listed in the Arrest Warrant. In the circumstances, the arrest is unlawful. 21 The above description of the arrested ROV does not reflect the terms of the arrest warrant. As noted above, the warrant adopts language that reflects the name of the second defendant in the writ, namely 'Saab Seaeye Leopard 1702 Remotely Operated Vehicle'. The affidavit of arrest simply refers to 'the Defendant' as having been arrested. The adoption of the terminology ROV 1702 and ROV 1704 to distinguish between the two ROVs was raised for the first time after the arrest was made. In the correspondence before then the descriptions used in the writ were understood to differentiate between the two ROVs, only one of which had been on the Offshore Guardian. 22 Despite the above reference to 1702 and 1704, nearly two weeks later on 10 February 2020, the solicitors for FCDS and DWS wrote to the Marshal in the following terms: We act for … [FCDS], the party named as the relevant person in the Proceedings. We also act for [DWS], the owner of ROV1702. … Our clients had additional equipment at Neptune Marine's premises when ROV1702 was arrested. We attach three photographs of the equipment … Our clients urgently require the Equipment for a job. We understand that the Equipment is not subject to the arrest warrant. 23 Significantly, the solicitors for FCDS and DWS themselves referred to the arrested ROV as ROV 1702. As the use of the numbers '1702' and '1704' to differentiate between the two ROVs appears to have first been raised by DWS well after the arrest, the terms of the arrest warrant fall to be determined in the context of the descriptions used in the writ to differentiate between the ROVs. The terms of the arrest warrant were apt to describe the second defendant because it did not refer to the ROV as having been lately on board the Offshore Guardian. Therefore, I do not accept the claim that the ROV the subject of the writ was the one subsequently described as ROV 1702. The arrested ROV was that described as the second defendant, now given the description ROV 1704.

First Issue: Was the arrest warrant issued for the vessel that has been arrested? 24 Therefore, there is no merit in the claim that the arrest is of what DWS now describes as ROV 1702, being a vessel that is outside of Australia. The arrest is of the second defendant being the vessel at Welshpool, now described by DWS as ROV 1704. On the evidence, it is a vessel that is claimed to be arrested as a surrogate. 25 It was submitted for Guardian that there was no compelling evidence to support the claim that the vessel that had been arrested was the ROV 1704. I do not accept that submission. Mr Ford, the sole director of each of FCDS and DWS, has deposed to the history of the location of each of the two ROVs from the time that they were each purchased. As a director of both companies he is able to depose to those matters. He was not cross-examined. Separate issues arise as to whether FCDS or DWS is the owner of ROV 1702, but those matters do not bear upon the physical location of the ROVs. 26 The evidence is to the effect that ROV 1702 was on the Offshore Guardian but after works were completed in Bass Strait it was returned to storage and then sent to the west coast of Africa. On the other hand ROV 1704 was purchased in 2018, was mobilised for works to be completed in Exmouth and then was transported to Welshpool for repairs. 27 In the above circumstances, it is plain that Guardian commenced the proceedings on the basis of in rem claims against both vessels, one as being the subject of the maritime claim and the other as a surrogate. To the extent that there has been misdescription, it was a mistake as to the name and not as to the identity of the party. Therefore, any misdescription in the writ is of a kind that can be corrected by amendment in the exercise of the power conferred by under r 8.21(1)(c) of the Federal Court Rules 2011 (Cth): see Bridge Shipping Pty Ltd v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231. However, the proceedings have always been in respect of both ROVs and the arrest warrant was expressed in terms that would be understood to refer to what is now described as ROV 1704. There is no need for the arrest warrant to be amended. It speaks in the context in which it was issued. Any amendment now made to the writ to reflect the numbering used on the ROVs and therefore more accurately describe the ROV that was always understood by both parties to be the ROV named as the second defendant would not require any consequential amendment to the arrest warrant. 28 Therefore, the first issue does not raise a proper basis for the proceedings to be dismissed.

Second Issue: Is FCDS the owner for the purposes of s 19 of the Admiralty Act? 29 If (as I have determined) it is ROV 1704 that has been arrested, then Guardian claims that there was jurisdiction to arrest the vessel as a surrogate under s 19 of the Admiralty Act. It could only do so if FCDS was the true owner. 30 Mr Ford has deposed to the circumstances in which DWS purchased ROV 1704. He has produced an equipment purchase agreement made on 19 July 2018. It identifies the equipment the subject of the purchase agreement as 'M/V Seaeye Leopard 1704 together with the items set out in the attached Packing List'. Mr Ford deposes that ROV 1704 was never owned by FCDS. He says that the purchase was financed by the Commonwealth Bank. 31 Guardian sought to rely upon evidence of statements made on the Dive Works website and in the Dive Works general terms and conditions to the effect that Dive Works was the owner and operator of both ROVs having been the first to order such equipment in Australia. It may be that those statements might be sufficient to give rise to some form of representational based claim if they were relied upon by Guardian. Indeed, Guardian advanced submissions to the effect that the evidence gave rise to a form of estoppel that meant that FCDS could not deny that it was the owner of the ROVs. However, the precise way in which the estoppel was said to operate in the context of an in rem claim under the Admiralty Act was not articulated. In any event, there was no evidence that there had been any reliance by Guardian on the statements made on the website and in the terms and conditions. The managing director of Guardian provided an affidavit and deposed to a belief that FCDS trading as Dive Works owned and operated the ROVs. However, that evidence fell well short of what would be required in order to establish some form of estoppel. Further, it was not articulated how the estoppel would operate as against DWS if it was otherwise demonstrated to be the true owner. 32 Otherwise, there was no real explanation as to the basis upon which the Court should not accept the evidence as establishing that DWS was the true owner of ROV 1704. 33 I accept the submission for DWS that the documents that it has provided (the authenticity of which are not disputed) are sufficient to establish that it is the owner even though the ROVs were in the possession and control of FCDS. The evidence establishes the existence of a documented lease arrangement between DWS and FCDS which explains why FCDS was able to have the use of ROV 1704. 34 Therefore, DWS has demonstrated that it is the true owner of ROV 1704. 35 Guardian accepted that if it is determined that DWS was the true owner of ROV 1704 then the arrest should be set aside and the in rem claim against the second defendant set aside with consequential orders as to the undertaking given by DWS and liability for the costs of the Marshal. However, it maintained that the proceedings should not be dismissed because it was reasonably arguable that the requirements for a claim under s 17 or s 18 of the Admiralty Act were met in respect of ROV 1702. There appeared to be no issue, at least for the purposes of the present application, that FCDS was in possession or control of ROV 1702 at the time the cause of action arose. In contention was whether FCDS was the true owner or demise charterer of ROV 1702 when the writ was issued. 36 DWS accepts that FCDS was the original owner of ROV 1702 and that it granted a security interest over the ROV 1702 in favour of the Bank. Before me are extracts from the Personal Property Securities Register (Register) showing the registration of the Bank's interest. Significantly, the registration has not been removed and it is not disputed by DWS that it remains in place. 37 However, DWS says that by an agreement made on 1 June 2018 FCDS's ownership interest in ROV 1702 was transferred to DWS and the Bank loan was novated to DWS. It has produced a copy of the novation agreement and correspondence from the Bank. It has also produced a lease agreement dated 24 May 2018 between DWS and FCDS by which various items of equipment including ROV 1702 was leased by DWS as owner to FCDS as hirer. The lease agreement includes a warranty by DWS that it has and will retain ownership of the equipment during the term of the agreement. 38 Guardian sought to make something of the fact that the lease agreement was entered into a few days before the novation agreement with the Bank together with the state of the Register to support its claim that FCDS was the owner of ROV 1702. However, it would not be unusual for documents to be signed in anticipation of bank approval being forthcoming. The fact that there has been no change to the Register is insufficient in the face of the other documents to conclude that FCDS remains the owner. In that regard, it is significant that the Bank was a party to the novation agreement. 39 There has been no application to cross-examine the deponents to affidavits relied upon by DWS. It is not submitted that the lease agreement and the novation agreement are not authentic. In those circumstances, in order to succeed in its claim that FCDS is the true owner, DWS would have to demonstrate that the lease agreement and the novation agreement with the Bank were some form of sham or, if not, that the corporate veil should be lifted so that the property of DWS should be treated as the property of FCDS. The evidence fails to provide any arguable basis for such a claim. 40 It was separately submitted that the lease agreement and the manner in which FCDS provided services by deploying the ROVs meant that it was a demise charterer of ROV 1702. The claim rests upon evidence of the terms of the lease agreement. In light of the view I have reached on the third issue it is not necessary to reach a final view on whether there is an arguable basis for such a claim that might otherwise support the writ as against the first defendant.

Third Issue: Are the ROVs ships? 41 It is common ground that the in rem jurisdiction sought to be invoked by Guardian depends upon each ROV being a 'ship' within the terms of the definition of that term in s 3 of the Admiralty Act and it is an issue that must be determined on the present application. Its resolution depends upon the proper construction of the statutory language and a consideration as to whether, on the facts, the ROVs conform to the statutory terminology.

Principles of statutory construction 42 The general principles to be applied when discerning the meaning of statutory language are clear. The task is to ascertain the contextual meaning of the words used: SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 at [14]. The relevant context includes legislative history and extrinsic materials: Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39]. In appropriate cases, the statutory language should be considered within its wider legal context including the state of the law at the time that the statutory provision was enacted: Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273 at [11]. It may also be appropriate to apply an understanding of the commercial context addressed by the statutory words: Tabcorp Holdings Ltd v Victoria [2016] HCA 4 at [89]. 43 Although the application of the rules of statutory interpretation will properly involve the identification of a statutory purpose from contextual sources and the language of the statute as a whole, it must be a purpose that 'resides' in the 'text and structure' of the legislation: Lacey v Attorney General (Qld) [2011] HCA 10; (2011) 242 CLR 573 at [44]. Therefore, consideration of contextual matters should not deflect the Court from what is a 'text-based activity': Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42; (2014) 254 CLR 247 at [42]. Hence the warnings that matters of context should not be used to displace the clear meaning of the text: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47]. 'Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text': Consolidated Media Holdings Ltd at [39]. 44 Applying these principles, it is well established that the interpretation of the Admiralty Act is to be guided by the fact that it was enacted to place into statutory form the recommendations of the Law Reform Commission Report No 33, Civil Admiralty Jurisdiction (1986) (Report): Tisand Pty Ltd v The Owners of the Ship MV 'Cape Moreton' (ex 'Freya') [2005] FCAFC 68; (2005) 143 FCR 43 at [64]-[65] (Ryan and Allsop JJ). 45 It is evident from the terms of the Report that the purpose of the term 'ship' was to serve two jurisdictional purposes: Report at para 98. 'First, it provides a convenient means of describing the subject matter of admiralty jurisdiction … The reference to ship [in provisions describing the heads of admiralty jurisdiction] effectively restricts the jurisdiction to maritime matters. The second use of "ship" is to identify the most important of the types of res against which in rem proceedings can operate'. Having described both, the Report identified no reason to define 'ship' differently in its different contexts. The scheme of the Admiralty Act reflects that recommendation. 46 Therefore, the definition of 'ship' forms part of the legislative provisions by which admiralty jurisdiction is conferred on this Court. Consequently, it is a provision that 'should be interpreted liberally and without imposing limitations not found in the express words': Elbe Shipping SA v The Ship 'Global Peace' [2006] FCA 954; (2006) 154 FCR 439 at [74] (Allsop J). This is because to do otherwise would compromise the evident purpose of conferring jurisdiction to effectively facilitate the in rem jurisdiction that has been a long standing feature of admiralty law due to the ability of ships to be readily removed from a jurisdiction and thereby defeat legitimate claims.

The statutory language 47 The relevant statutory definition is expressed as follows: ship means a vessel of any kind used or constructed for use in navigation by water, however it is propelled or moved, and includes: (a) a barge, lighter or other floating vessel; (b) a hovercraft; (c) an off-shore industry mobile unit; and (d) a vessel that has sunk or is stranded and the remains of such a vessel; but does not include: (e) a seaplane; (f) an inland waterways vessel; or (g) a vessel under construction that has not been launched. 48 The form of the provision is to state a general definition and then supplement the definition by further express categories to be included within the term. The general words are 'a vessel of any kind used or constructed for use in navigation by water, however it is propelled or moved'. Statutory language deploying the concept of a vessel used in navigation by water (separately or together with other language) in order to describe the extent of admiralty jurisdiction is long standing and may be found across jurisdictions. The Report recommended the adoption of that language on the basis that it was adequate for the statutory purpose given the then existing background of case law: para 99. That, of itself, makes at least the then existing case law an important contextual aspect. More broadly, it is recognised that, in the admiralty jurisdiction, historical concepts provide important background and context when construing the statutory language: The Owners of the Motor Vessel 'Iran Amanat' v KMP Coastal Oil Pte Limited [1999] HCA 11; (1999) 196 CLR 130.

Three attributes 49 The general words of the definition describe three attributes, two positively and one implicitly. The positive attributes require the disputed structure to be both a vessel and used (or constructed for use) in navigation by water. The implicit attribute arises from the words 'however it is propelled or moved'. Those words emphasise that navigation means moved by means of the water, not (for example) something that is an aid to navigation. Structures that are fixed or permanently anchored are not within the general words and must be included in the definition, if at all, by the additional inclusive words of the definition. This explains the uncertainty that led to the language in para (c). I do not accept the submission that the language in para (c) reflects some view that there was uncertainty about whether submersibles could be ships. The language of the Report reveals an uncertainty that arose because rigs (some of which were submersibles or semi-submersibles) were fixed upon or jacked-up from the sea floor. It is their attachment not their submersible character that led to the terms of para (c). I note that the reasoning for the inclusion of rigs in the definition was expressed in the Report in the following terms (para 104): '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'. Implicitly, it is the ability to move all rigs that justifies their inclusion in the definition. This can be seen in the earlier discussion at para 103 of the Report where the possibility of allowing claims to accrue against a rig while drilling but only allowing arrest when the rig was mobile was considered and ultimately rejected.

Hovercraft and seaplanes 50 The express inclusion of hovercraft and the reasons for doing so stated in the Report are instructive as to the view that was taken as to the scope of the general words. The Report stated (para 101): The position with hovercraft is somewhat different, since they are primarily 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 admiralty jurisdiction in a number of overseas countries … The definition should not extend to hovercraft used only over land, swamp or marshy terrain. 51 There was also a reference to a means by which the inclusion of hovercraft could be undertaken in a manner that would 'eliminate the possibility of admiralty jurisdiction covering matters unconnected with the sea'. The opening part of the quoted passage distinguishes hovercraft from aircraft and seaplanes. The Report recommended against their inclusion in the admiralty jurisdiction even confined to salvage operations and when seaplanes were afloat when 'they behave more like ships than aircraft' (para 100). 52 Implicit in these and other recommendations is a recognition that the general words concerning ships apply to vessels that traverse open water in a manner that makes them amenable to the breadth of principles that form the admiralty jurisdiction, including salvage, liability for damage in the event of collision and the in rem jurisdiction as to arrest. These matters of context make evident that the purpose of the definition of ship was to identify a class of marine navigable structures which had characteristics that made them appropriately amenable to the nature and extent of the admiralty jurisdiction.

The background of case law identified in the Report 53 The Report included a reference to the following passage from DR Thomas, Maritime Liens (Stevens & Sons, 1980), para 279, as part of the 'background of case law': The precise understanding of the concept of a ship under the original Admiralty jurisdiction is of uncertain import. There exist various statutory definitions of the term but these in themselves are not conclusive of the issue. It is probable, should the question arise, that reference to a ship would be viewed as bearing a wide connotation and as including any description of vessel used, intended to be used, or capable of being used in navigation. 54 It was also noted that in English legislation that governed the extent of the admiralty jurisdiction 'ship' was defined as including 'any description of vessel used in navigation'. 55 Earlier in the report (para 278) reference was made to Wells v Owners of the Gas Float Whitton (No 2) [1897] AC 337 for the proposition that a raft which is constructed so as to be capable of being used in navigation may be a ship and therefore a proper subject matter of salvage. The Report also referred to that decision as part of the background of case law. It is a long standing decision of well recognised authority. It concerned a gas float, being described in the report as '50 feet long and 20 feet broad; its hull somewhat like that of a ship or boat, its two ends shaped like the bow of a vessel: it was made of iron, and had no oars, mast, stern-post, fore-post or rudder'. It held aloft a gas light rigged on a pyramid of wood about 50 feet high. It could not be used for navigation and was almost impossible to tow. It was moored to warn vessels of the presence of a shoal. 56 Lord Herschell held that the gas light was not a ship stating: It was not constructed for the purpose of being navigated or of conveying cargo or passengers. It was, in truth, a lighted buoy or beacon. The suggestion that the gas stored in the float can be regarded as cargo carried by it is more ingenious than sound. 57 Lord Watson agreed finding that the gas light was 'wholly unfit for the purpose of being navigated as a vessel, and that it never was used, or intended to be used, for any such purpose': at 348. Lord Macnaghten and Lord Morris also agreed. 58 Reference was also made to the following passage in KC McGuffie, PA Fugeman and PV Gray, British Shipping Laws Vol 1, Admiralty Practice (Stevens & Sons, 1964) para 69: 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, jetsum, lagan and derelict. 59 It appears from the language used by Lord Herschell and Lord Watson that the reference to use in navigation was not confined to conveying cargo or passengers and included any vessel that was to be navigated and this was in contemplation by the Report. This is borne out by the state of the case law at the time of the Report (see below).

The decided cases 60 In addition to the statements in The Gas Float Whitton, the following decisions prior to the Report considered whether particular things are vessels used in navigation. 61 In Merchants Marine Insurance Co Ltd v North of England Protecting and Indemnity Association (1926) 26 Ll L Rep 201 the Court of Appeal was concerned with whether a floating crane was a 'ship or boat, or any other description of vessel used in navigation'. It was described by Bankes LJ as being in the shape of a vessel and constructed so that it could float. It was also constructed so that it could be moved about because it was not intended to be permanently moored in one place. Bankes LJ concluded as follows: Now what do we find with regard to the structure? It is in fact a structure upon which a crane is fixed, and permanently fixed. It has no motive power of its own. I do not attach much importance to that, but it is an incident. It is not capable of being steered: it has no rudder. I think that again is only an incident, but I think it is rather an important incident. It is undoubtedly capable of being moved, but it is obviously so unseaworthy that it can only be moved short distances, or comparatively short distances, and only when the weather is exactly favourable … it has only been moved very occasionally … the conclusion I come to is that, for this purpose and for the purpose of the construction of this rule, it is more accurately described as a floating platform for this crane than as a ship or vessel. I desire to say, speaking for myself, that I do not think it is possible to frame an exhaustive definition which will be of assistance in other cases, or to attempt an exhaustive test to apply for the purpose of deciding whether any particular object is a ship or vessel. 62 Reference was then made by Bankes LJ to cases in which hopper barges and a dumb barge 'whose life was spent in being towed up and down and being navigated'. Conclusions that they were ships were cited with support. Both Scrutton LJ and Sargant LJ agreed that it had not been shown that the primary judge was wrong in concluding that the floating crane was not a vessel used in navigation. Scrutton LJ also eschewed an exhaustive definition stating (at 203): … the discussion to-day … of the numbers of various incidents and various kinds of things to which this definition has been applied, has convinced me that it is of no use at present to try to define it, and the only thing I can do in this case is to treat it as a question of fact … 63 In Polpen Shipping Co Ltd v Commercial Union Assurance Co Ltd (1942) 74 Ll L Rep 157, Atkinson J considered whether a flying boat was a ship. His Honour expressed the view that a ship or vessel involves two ideas, namely (a) a hollow structure intended to be used in navigation in the sense that it is intended to do its real work upon the seas; and (b) which is capable of free and ordered movement from one place to another. Although a flying boat can float and navigate short distances, that was incidental to its 'real work'. On that basis, the flying boat was held not to be a ship. 64 In Marine Craft Constructors Ltd v Erland Blomqvist (Engineers) Ltd (1953) 1 Ll L Rep 514, a pontoon that had previously been used as the platform for a floating crane was used to transport part of the crane after the crane was removed. Lynskey J considered the attributes of the pontoon at the time it was being used for transportation rather than its original use as part of a floating crane in concluding that the platform was a vessel used in navigation. 65 In Cook v Dredging & Construction Co Ltd [1958] 1 Lloyd's Rep 334, Jones J siting on the Liverpool Assizes had to consider whether a flat bottomed floating structure with a deck, companion ladders and other characteristics of a ship, but no rudder or means of propulsion, was a ship. It was not used to transport or store the material being dredged which was loaded directly onto barges. However, the structure was moved by tow from place to place when required. It was held to be a vessel used in navigation. 66 In Canada v St John Shipbuilding & Dry Dock Co Ltd (1981) 126 DLR (3d) 353, the Federal Court of Appeal in Canada considered whether a barge with a heavy crane and space to store cargo that was not self-propelled was a ship for the purposes of the Court's maritime jurisdiction. The applicable statutory definition stated that a ship included 'any description of vessel, boat or craft used or capable of being used solely or partly for marine navigation without regard to method or lack of propulsion'. The barge was held to be a vessel. After reviewing English and Canadian authorities, the Court reasoned at [28] as follows: She was a barge built for use on water. She was capable of being moved from place to place and was so moved from time to time, as it was in this case to unload the cargo … She was capable of carrying cargo and had, in fact, done so. She was certainly capable of carrying people and obviously had to do so to enable the crew to carry out their duties. While it appears that she was not capable of navigation herself and was not self-propelled, those facts do not detract from the fact that she was built to do something on water, requiring movement from place to place. Therefore, in my opinion, the [barge] was a ship.

Cases since the Report 67 In Steedman v Scofield [1992] 2 Lloyd's Rep 163, the question was whether a jet ski was a ship or a boat or any other description of vessel used in navigation. DWS placed considerable reliance upon the reasoning by Sheen J at 165-166 which had the following aspects: (1) the word boat conveys the concept of a structure that uses a concave shape for buoyancy; (2) a vessel is usually a hollow receptacle for carrying goods or people and in common parlance refers to a craft larger than rowing boats; (3) a person cannot sit in a jet ski stopped in the water because it has to reach a speed where it is stable and a rider can then board the jet ski, whereas a boat is sufficiently buoyant that a person can sit in it even though it is still; and (4) navigation is the nautical art or science of conducting a ship from one place to another and is also used to describe the action of navigating or ordered movement of ships on water and the phrase 'used in navigation' conveys the concept of transporting persons or property by water to an intended destination. 68 In The 'Von Rocks' [1998] 2 Lloyd's Rep 198, the Ireland Supreme Court considered an application to set aside the arrest of a maritime dredger. The relevant admiralty jurisdiction applied to any ship, a term defined to include every description of vessel. 'Vessel' was then defined to include 'any ship or boat or any other description of vessel used in navigation'. 69 The dredger was described by the primary judge as a floating platform when not in use and as being jacked-up by hydraulically operated legs to form a rigid platform when in use. Also as having 'no bow, no stern, no anchors, no rudder or any means for steering, and no keel or skeg' and 'no means of self-propulsion, mechanical or otherwise' and 'no wheelhouse'. It may be transported by road or towed by sea. When under tow it was unmanned and was 'merely an inert object'. On appeal Keane J observed at 206: The authorities, some of which are not easy to reconcile, demonstrate that it would be difficult, and not particularly helpful, to attempt to formulate a general definition of 'ship' or 'vessel' applicable to every case. With that caveat, however, one can, as a starting point take it that, as an irreducible minimum, the object under consideration must not merely be capable of traversing the surface of water, but must spend a reasonably significant part of its operative life in such movement. 70 As to the statement by Sheen J in Steedman that 'the phrase "used in navigation" conveys the concept of transporting persons or property by water to an intended destination', Keane J said at 207: I can appreciate that, in general term, this is what the phrase 'used in navigation' would convey. If, however, a craft designed and constructed for use on the sea and which, in the course of its contemplated use, regularly traversed the water, but did not carry cargo or passengers, is not to be regarded as a 'ship' it would follow that objects such as floating cranes or, indeed vessels used for such purposes as marine exploration, could similarly not be regarded as ships. The preponderance of authority would seem to be against that view. 71 With respect, those observations appear to be correct and for that reason it cannot be the case that 'use in navigation' is a term that is confined to use in navigation for the transportation of cargo or passengers. If that is the use of a vessel then that will, in all likelihood, lead to the conclusion that the vessel is a ship. However, there are vessels deployed in other ways that may otherwise support the conclusion that the vessel is of a kind used in navigation by water. 72 Significantly, Keane J pointed out that the definition there under consideration was non-exhaustive and might include craft that might not be regarded as 'used in navigation' in the conventional sense: at 208. Noting that aspect, the conclusion reached was that the maritime dredger was a ship on the following basis: Von Rocks undoubtedly lacks some of the characteristics one would normally associate with a 'ship'. It is not self-propelled, it normally is not manned by a crew and it has no form of rudder or other steering mechanism. But it is a structure designed and constructed for the purpose of carrying out specific activities on the water, is capable of movement across the water and in fact spends significant periods of time moving across the seas from one contracting site to another. 73 Guardian placed some reliance upon the Canadian decision in Cyber Sea Technologies Inc v Underwater Harvester Remotely Operated Vehicle 2002 FCT 794. In that case an unmanned submersible device used in logging trees from a flooded reservoir had been arrested. Like the ROV, it was tethered by an umbilical from which it was operated. It could be operated from the shore or a barge. An application was brought to set aside the arrest. In that jurisdiction, the relevant question was framed as being whether the action plainly and obviously could not succeed by reason of the absence of a ship over which to take jurisdiction. It appears from the decision that even a slight possibility that the submersible was a ship would be sufficient to defeat the application. In that context, Hargrave P said: 'I hesitate to say, in absolute terms, that the submersible is a ship, however there is a strong indication to that end': at [3]. However, that view was expressed in a context where the relevant definition of ship was 'any vessel or craft designed, used or capable of being used solely or partly for navigation, without regard to method or lack of propulsion: at [9]. The broader definition was significant to the conclusion reached: at [11]. 74 The general words in the definition in the Admiralty Act are confined to a vessel. Further, I am obliged to determine the jurisdictional decision. The Cyber Sea decision rests upon an analysis that is not informed by the analysis of many of the English cases to which I have referred which formed the context for the Report and the definition as adopted in Australia. In those circumstances, the decision in Cyber Sea is of limited assistance. I note that by reason of the statutory provisions in Canada, an arrest could be made of a vessel used in internal waterways. Although the same is not the case in Australia I do not consider that to be a basis for distinguishing the decision because it is a matter that would not affect the scope of the key concepts of vessel and navigation. 75 In R v Goodwin [2005] EWCA Crim 3184, the Court of Criminal Appeal considered the meaning of the words 'used in navigation' and drew a distinction between craft used to undertake an orderly progression from one place to another on the one hand and craft used recreationally with no such purpose or object in mind. 76 In Michael v Musgrave (trading as Ynys Ribs) (The 'Sea Eagle') [2011] EWHC 1438, one of the issues was whether a rigid inflatable boat (RIB) was a ship which was defined as 'only a seagoing vessel'. The decisions in Steedman and Goodwin were considered. The following matters were identified at [30] as leading to the conclusion that the RIB was 'a ship in the sense of being a vessel capable of being used, and actually used, in navigation': (a) the vessel was certified for use on open water and had been so used; (b) she was used to make ordered progression; (c) she was designed for serious purposes which included the planned or ordered movement from one place to another; and (d) the vessel was not designed or constructed for the simple purpose of 'messing about in boats'. 77 In SC Derrington and JM Turner QC, The Law and Practice of Admiralty Matters (2nd ed, Oxford University Press, 2016) the authors respectfully question whether there is merit in using recreational use as a basis for concluding that a vessel is not for use in navigation: at para 2.69. There is force in their observation that 'sailing yachts or power boats are ships'.

Conclusions concerning the definition 78 It can be seen that the decided cases eschew any attempt at a comprehensive definition of the characteristics of a vessel used in navigation by water. They reveal that the terminology is not confined to vessels that are used to transport cargo or passengers. Various types of barges that have been designed for use on the water and as part of that use, that are seaworthy and able to be navigated from one place to another under tow, have been held to be within the general language used in the definition of a ship. That is so even though for much of the time they were not used in navigation. There is some indication that craft which are small or which do not have the basic character of a buoyant structure that can be moved on water do not come within the definition. Perhaps more contentious is whether navigation connotes some form of purposeful or ordered direction from one place to another. 79 A number of the authorities refer to navigation across or on water. In this case we are concerned with a submersible vehicle that moves through the water. I have not been referred to any decided case that has excluded particular vessels from the general words on the basis that they move underwater. The statutory language in Australia refers to 'navigation by water'. In my view, the language does not thereby exclude all structures that are submersible or undertake submarine navigation. A structure that moves through the water may be described as undertaking navigation by water. 80 Otherwise, the cases tend to review the purpose, attributes and capabilities of the structure in issue and then draw a conclusion by reference to all of those matters as to whether the structure meets the definition. In effect, the cases consider the extent to which the particular structure lacks what might be described as the usual attributes associated with the concept of a vessel that can navigate by water and whether the departure is so great that it can longer be given the relevant description. The context of the definition as marking out the boundaries of the admiralty jurisdiction, including the in rem power to arrest, is significant. Attributes which mean the vessel can be moved readily from the jurisdiction or give to the kind of claims provided for in the Admiralty Act will be particularly significant.

Application to present circumstances 81 Affording the statutory language a liberal construction consistent with its role in defining the ambit of the Court's jurisdiction, for the following reasons, the ROV does not fall within the general words of the statutory definition. As it was not contended that any other language in the definition was relevant, it follows that the ROV is not a ship. 82 The ROV lacks the usual characteristics of a ship as that term is used as a matter of ordinary parlance. Therefore, it must fall within the additional breadth afforded by the statutory terminology of a vessel for use in navigation by water. The combination of the following attributes means that the ROV lacks sufficient attributes to fall with the terms of the statute. 83 The ROV is not a vessel that floats on or below the water. It does not obtain buoyancy by displacing water. On the contrary, it is designed so that water flows through the ROV. It has flotation devices, but on the evidence will sink if it becomes detached from the umbilical. 84 Although the ROV can be steered or navigated through water, its ability to do so is relatively confined. It reaches the appropriate depth by being lowered into the water from the support vessel using the LARS and a winch and not by its own capacity to navigate its descent. Once it reaches the appropriate depth it can move out from the LARS but only as far as its tether. 85 The ROV does not move from one site to another by being navigated across or through navigable waters. It is not towed. Rather, it is loaded onto a vessel and transported as cargo. It is the main vessel that navigates the ROV to the point where it is winched below the sea surface. 86 The ROV is only self-propelled in a limited sense. It can only move very short distances while attached to the LARS and TMS. Otherwise it is moved through the water within the LARS and across the water by the main vessel. 87 To the limited extent that the ROV might be described as being capable of navigation, it is not capable of navigating the high seas or open waters in a manner that gives rise to the peculiar risks and dangers that give rise to the particular rules of the admiralty jurisdiction. It does not have a capacity to float or withstand the perils of the sea whilst being towed. It is not apt to describe the ROV as seaworthy in any relevant sense. 88 The ROV is unable to leave the jurisdiction by its own effort and thereby readily evade claims. It is dependent entirely upon the main vessel. 89 The ROV is not registered as a ship. 90 The ROV is small. There is a history of not including row boats and small pleasure boats within the jurisdiction of admiralty courts: see, for example, the definition of ship in s 2 of the Admiralty Court Act 1861 (UK) and the decision in Steedman. Navigation is an activity undertaken at a scale that usually enables the navigation of cargo, passengers or large equipment by water. The ROV is not the means by which such activities are carried out. Although the ROV can pick up items and may be the means by which equipment is brought close to where it is needed, those capacities are not comparable in any meaningful respect to the navigation of cargo or passengers. The ROV has a very limited capacity to carry anything in addition to its own equipment and could only retrieve relatively small objects by way of salvage or otherwise from below the surface. 91 The ROV does not look like a vessel used in navigation and in most respects does not act like a vessel used in navigation. It is a submersible piece of equipment, a vehicle for undertaking remotely-controlled activities underwater. When deployed it forms part of the equipment of the main vessel. It is not itself a vessel used in navigation.

Costs and other orders 92 It was accepted by both parties that costs should follow the event on the application and neither party sought special cost orders. It was also accepted that if the claim by DWS that the ROV was not a ship was upheld then the orders sought in relation to the undertaking and the costs of the Marshal should be made. Arrangements were made for these reasons to be delivered without the requirement for attendance by the parties. Although the matter was brought on urgently, there was no evidence of any imminent use to which DWS or FCDS seeks to deploy the ROV. In those circumstances, I propose to make orders on the basis that their operation will be stayed for a short period in case any party wishes to make any further application. In the result counsel appeared when this judgment was delivered and there was no opposition raised to the stay of the orders for a short period. I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Colvin.