Rail Equipment Leasing Pty Ltd v CV Scheepvaartonderneming Emmagracht

Rail Equipment Leasing Pty Ltd v CV Scheepvaartonderneming Emmagracht - [2008] NSWSC 850 - NSWSC 2008 case summary — Zoe

[11]

2/08 Rail Equipment Leasing Pty Ltd v CV Scheepvaartonderneming Emmagracht 3/08 Baltship v CV Scheepvaartonderneming Emmagracht 4/08 Emmagracht v Six M2 Mark III Locomotives JUDGMENT 1 Rein J: Rail Equipment Leasing Pty Ltd ("REL") owns six second-hand locomotives and associated rolling stock ("the goods"), that it purchased from a vendor in Sweden. REL had the goods shipped to Denmark for repair, and then arranged for the goods to be shipped from Denmark to Newcastle, New South Wales. 2 REL contracted with Baltship AS ("Baltship") to carry the goods from Denmark to Newcastle. Baltship contracted with CV Scheepvaartonderneming Emmagracht ("the carrier") to carry the goods. The carrier owns (or has chartered) the MV Emmagracht ("the ship"). The carrier issued a bill of lading to Baltship ("the ocean bill") and Baltship issued a similar document to REL ("the Baltship bill"). 3 During the voyage on board the ship, two locomotives shifted and caused damage to the side of the ship's hold, and to one of the ship's fuel tanks, causing fuel oil leakage. The two locomotives were also damaged. 4 The carrier alleges that the cradles (or "skids" as they are referred to in one report) on which the goods were placed were defective, in that they were made out of softwood (pine and plywood) and not hardwood. Baltship alleges that the ship's lashing was inadequate, causing the locomotives to loosen, and allowing them to shift within the deck's hold. 5 The ship docked in Savannah, in the United States. The goods were removed from the ship and cleaned of oil contamination consequent upon damage to the heavy oil tank and new cradles were constructed at that port. The carrier claims the costs of and incidental to the cleaning and repair of the ship and construction of the new cradles, including additional port costs, as damages resulting from the incident, and claims those damages from Baltship and REL. 6 The ship arrived at Newcastle Port on 21 July 2008 and the goods have been discharged from the ship. Baltship and REL have sought to obtain the goods but the carrier has not produced the delivery orders that will permit release of the goods from the Port to either Baltship or REL. 7 On or about 24 July 2008, the carrier notified REL and Baltship that it was exercising a lien over the goods of the plaintiff (see letter of 24 July 2008, Exhibit 2). A threat to do so was advised to Baltship's Danish lawyers by letter from the carrier's Danish lawyers of 21 July 2008. 8 The carrier claims that it has expended $US 1,098,877.67 on the repairs to the ship and associated costs and it claims a lien in that amount. 9 The goods are now held at the Port of Newcastle and are incurring expenses of $1400 per day at present (see affidavit of Mr Robert Wilson sworn 5 August 2008). 10 It appears clear from the material that two locomotives have been significantly damaged, but the cost of repair is not known: see Exhibit 5. If repair of the locomotives is needed that repair process would obviously delay the locomotives and rolling stock being put into service. I was informed from the Bar table that the goods have been purchased to enable their utilisation in dealing with the movement of grain from around New South Wales, and it is open to infer that REL is in the business of leasing railway locomotives and locomotives to third parties as part of its business. There is evidence that the carrier offered to release the goods in return for an appropriate form of security, and even to provide a cross-security: see p 80 and p 89, Exhibit 2. Neither Baltship nor REL took up the offer, with Baltship maintaining the position that the carrier has no entitlement to make any claims upon the goods, leading to the present impasse, and the goods remaining on the wharf. 11 Both REL and Baltship have commenced proceedings against the carrier. Mr I.G.B. Roberts of Counsel appears for REL and Mr Levingston of Counsel appears for Baltship. Those matters came before me on Monday 4 August and I stood them over until Tuesday 5 August to permit the carrier further time to prepare material. Mr Street SC appears with Mr Cox for the carrier. On Tuesday 5 August, the carrier sought leave to file in Court a Writ, which leave was not opposed and was granted. It was agreed that the same core issues arise in each of the three proceedings, and that the three matters should be heard together. 12 The carrier, together with Spliethoff Transport Bv and a third Dutch company, has already commenced proceedings against REL and Baltship in Holland (see Exhibit 1, a translation of which is found as Annexure "E" to the affidavit of the carrier's solicitor Mr Robert Reginald Wilson of 5 August 2008). Proceedings against the carrier have been commenced in the United States by Baltship: see Exhibit 7. 13 REL and Baltship, in broad terms, seek release of the goods to REL or Baltship, claiming that the carrier has no right to a lien and hence, no right to possession of the goods. The carrier, by its Writ, seeks to obtain security over the goods in connection with its Dutch proceedings, pursuant to s 29 of the Admiralty Act ("the Act). Mr Street emphasised that the Writ is limited in its scope to relief pursuant to s 29 of the Act. It is the carrier's contention that this Court has no jurisdiction to hear the claims of REL and Baltship. The carrier contends jurisdiction was ousted by agreement of the parties in the ocean bill. S 29 of the Act is in the following terms: "Security in Relation to Stayed or Dismissed Proceedings S 29. (1) Where: (a) it appears to the court in which a proceeding commenced under this Act is pending that the proceeding should be stayed or dismissed on the ground that the claim concerned should be determined by arbitration (whether in Australia or elsewhere) or by a court of a foreign country; and (b) a ship or other property is under arrest in the proceeding; the court may order that the proceeding be stayed on condition that the ship or property be retained by the court as security for the satisfaction of any award or judgment that may be made in the arbitration or in a proceeding in the court of the foreign country. (2) Subsection (1) does not limit any other power of the court. (3) The power of the court to stay or dismiss a proceeding includes power to do so on such conditions as are just, including a condition: (a) with respect to the institution or prosecution of the arbitration or proceeding in the court of the foreign country; and (b) that equivalent security be provided for the satisfaction of any award or judgment that may be made in the arbitration or in the proceeding in the court of the foreign country. (4) Where a court has made an order under subsection (1) or (3), the court may make such interim or supplementary orders as are appropriate in relation to the ship or property for the purpose of preserving: (a) the ship or property; or (b) the rights of a party or of a person interested in the ship or property. (5) Where: (a) a ship or other property is under arrest in a proceeding; (b) an award or judgment as mentioned in subsection (1) has been made in favour of a party; and (c) apart from this section, the award or judgment is enforceable in Australia; then, in addition to any other proceeding that may be taken by the party to enforce the award or judgment, the party may apply to the court in the stayed proceeding for an appropriate order in relation to the ship or property to give effect to the award or judgment".

[14]

Application of the amended Hague Rules S 10 (1) The amended Hague Rules only apply to a contract of carriage of goods by sea that: (a) is made on or after the commencement of Schedule 1A and before the commencement of Part 3; and (b) is a contract: (i) to which, under Article 10 of the amended Hague Rules, those Rules apply; or (ii) subject to subsections (1A) and (2)--for the carriage of goods by sea from a port in Australia to another port in Australia; or iii) contained in or evidenced by a non-negotiable document (other than a bill of lading or similar document of title), being a contract that contains express provision to the effect that the amended Hague Rules are to govern the contract as if the document were a bill of lading. Note: The amended Hague Rules are set out in Schedule 1A--see ss 4(1) and 7(1). (1A ) If a contract for the carriage of goods by sea referred to in subparagraph 10(1)(b)(ii) is contained only in, or evidenced only by, a consignment note, the amended Hague Rules apply to the contract only if paragraph 5 of Article 10 of those Rules so requires. (2) The amended Hague Rules do not apply in relation to the carriage of goods by sea from a port in any State or Territory in Australia to any other port in that State or Territory. Construction and jurisdiction S 11 (1) All parties to: (a) a sea carriage document relating to the carriage of goods from any place in Australia to any place outside Australia; or (b) a non-negotiable document of a kind mentioned in subparagraph 10(1)(b)(iii), relating to such a carriage of goods; are taken to have intended to contract according to the laws in force at the place of shipment. (2) An agreement (whether made in Australia or elsewhere) has no effect so far as it purports to: (a) preclude or limit the effect of subsection (1) in respect of a bill of lading or a document mentioned in that subsection; or (b) preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory in respect of a bill of lading or a document mentioned in subsection (1); or (c) preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory in respect of: (i) a sea carriage document relating to the carriage of goods from any place outside Australia to any place in Australia; or (ii) a non-negotiable document of a kind mentioned in subparagraph 10(1)(b)(iii) relating to such a carriage of goods. (3) An agreement, or a provision of an agreement, that provides for the resolution of a dispute by arbitration is not made ineffective by subsection (2) (despite the fact that it may preclude or limit the jurisdiction of a court) if, under the agreement or provision, the arbitration must be conducted in Australia". 17 It was agreed that s 11(2) of COGSA was the relevant subsection. S 11 (2)(c) would appear to strike down clause 4 of the ocean bill, insofar as it seeks to oust jurisdiction, but Mr Street argued that the ocean bill was not a "contract of carriage" because it was not a contract of carriage contained in and regulated solely by the bill of lading (see T24-T25, 5 August 2008). 18 There are a number of problems with this argument. First, for s 11(2)(c) of COGSA to operate, what is required is: (a) an agreement (made in Australia or elsewhere) (b) which seeks to oust the jurisdiction of a Court of the Commonwealth or state in respect of (c) a "sea carriage document" relating to the carriage of goods from any place outside Australia to any place in Australia.

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22 Even if "contract of carriage" were relevant it is defined to mean "a contract of carriage covered by a sea carriage document (to the extent that the document relates to the carriage of goods by sea)", and includes "a negotiable sea carriage document issued under a charterparty from the moment at which that document regulates the relations between its holder, and the carrier concerned". The section thus contemplates a "hybrid document". 23 A further problem with the argument is that clause 4 specifically purports to confer exclusive jurisdiction on the Court of the country of the address of the carrier stated on page 1 of the bill. No such address has been stated. There is therefore no effective choice of jurisdiction in any event. This conclusion is relevant also to the argument of forum non conveniens which was predicated on the Dutch Court having had conferred upon it jurisdiction. Mr Street, having had his attention drawn to the defect in clause 4, made no submissions on the issue of forum non conveniens: see T26.16-39. 24 It follows that this Court has jurisdiction to deal with the claims of REL and Baltship. The Carrier's Writ 25 The writ of the carrier is directed principally to obtaining an order pursuant to s 29 of the Act pursuant to its claim to be entitled to commence proceedings pursuant to s 15 and s 17 of the Act and in view of the commencement of the Dutch proceedings. The carrier's position was that it was able to seek relief pursuant to s 29 based upon s 15 and s 17 of the Act and in the alternative, seek damages against the cargo based upon its asserted general maritime claim and or maritime lien, without thereby prejudicing its argument that the Court had no jurisdiction, and that if it failed in its objection to jurisdiction, it would, by reason of the issue of the writ, be taken to have submitted to jurisdiction: see Pan Australia Shipping v The Comandate No 2 [2006] FCA 112, 234 ALR 483, [48] - [55] (although the decision of the primary judge that there was in that case an election to abandon a London arbitration was overturned on appeal: see Comandate Marine Corp v Pan Australia Shipping [2006] FCAFC 192, 238 ALR 457). This position was accepted as correct by REL and Baltship and I will proceed on the basis that it was open to the carrier. Given that I have rejected the attack on the jurisdiction of the Court to hear Baltship's and REL's claims and no forum non conveniens argument has been advanced, and because it was accepted that the Dutch Court has not contractually had jurisdiction conferred upon it (and no other basis for it having jurisdiction was advanced), the application for relief pursuant to s 29 of the Act should be rejected.

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Further Background 26 There is agreement that two of the six locomotives broke loose of their lashings and cradles on the voyage in heavy seas. The deck log and a surveyor's report signed by representatives of the carrier, cargo and Baltship, make no reference to the condition of the cradles or to the cradles at all see: pp 22-27, Exhibit 2. A detailed report of 27 July 2008 has been prepared by Captain Paul Bennett, an expert retained by or on behalf of Baltship, in which he reviews the lashings utilised and he regards a number of them as set at too steep an angle and others as "inadequate": pp. 77-80 of Exhibit 2. The carrier tendered an unsigned draft report in the name of a surveyor, Captain Eddy Koolhof, in which draft an assertion is made in effect that the cradles, being made of soft wood, were defective. Key portions in the draft are: (1) "During my 48 year career in the industry… I have never encountered cargo skids manufactured from soft wood and in my opinion the use of softwood is not an industry norm" (p 26, Exhibit 5) (2) "The skids provided by the shipper were inadequately designed and constructed to withstand the forces that one should expect to encounter on a sea passage" (p 27, Exhibit 5) (3) "Four skids had failed and been destroyed and the remaining skids all showed indications of imminent failure and heavy oil contamination and could not be used" (p 26, Exhibit 5) 27 The booking note of 1 February 2008, although superseded by the ocean bill of lading, does make reference to a number of pertinent matters: (1) "Locos to be fitted with suitable seaworthy cradles under main body ( this cradle will be supplied by Baltship , and in case discharge of cradle needed - cradle will be fumigated and certificate to that effect will be supplied by us to Cargo owner), centre of gravity and position of lifting lugs to be clearly marked. All lashing points to be clearly marked" (emphasis added). (2) the carrier was to attend to preparing the loading, handling and following up safety regulations in relation to the cargo in question (see line 13-14, p 9, Exhibit 2) (3) the "Port Captain is fully aware of the cargo description and will make the necessary planning/arrangements" (line 18, p 9, Exhibit 2) (4) "Heat treated tanker stools (for the bodies) will however be delivered by the shoppers - they will have a height about 1100 mm, the total height of bodies ending up about 4.10 m" (line 57-58, p 9, Exhibit 2) (5) Drawings, photos etc have been sent to carriers - where COG [semble Centre of Gravity] dims [semble dimensions] etc can be seen (line 62, p 10, Exhibit 2) (6) "IMPORTANT: if ANY technical question/s AT ALL, Carriers are kindly asked to have a direct talk with Alex Olsen of Baltship, dir ph +45 87382116. The Carriers have done last few shipments for same account - and should have the necessary knowledge as well as experience of how to handle also this shipment (this time 6 Locos), failing which, or should Carriers have any questions as such, Carriers are kindly herewith asked to raise eventual questions. In the past Carriers have also received Photos of identical cargo!" (7) The documents detailing the construction of the cradles were provided to the carrier, see pp 12-14 and calculations performed by the carrier to prepare lashings diagrams, pp 15-19. The construction diagrams refer to the nature of the time utilised "Swedish or Finnish Pine" and "plywood walls". (8) The booking note is signed by Baltship "on behalf of the Merchants" and the first page refers to Baltship as "Agent to Merchants". The Claims 28 Baltship seeks: (1) a declaration that the defendant does not have possession of the cargo; (2) a declaration that the defendant has no lien over, and no right to assert a lien over, the cargo; (3) an order that the defendant forthwith sign and deliver to the plaintiff a delivery order and or such other document and do all such things as may be reasonably required by the defendant, which I shall treat as seeking an order that the defendant do whatever is necessary to ensure delivery of the cargo to enable Baltship to collect the cargo for REL; (4) a declaration that clause 4 of the ocean bill of lading has no effect insofar as it purports to preclude or limit the effect of COGSA; (5) an order restraining the carrier from taking steps in the Dutch proceedings. REL seeks: (1) a declaration that the carrier has no entitlement to exercise a lien over the goods; (2) a declaration that the purported exercise of the lien is illegal; (3) a declaration that the plaintiff is entitled to damages from the carrier; (4) ancillary orders similar to those sought by Baltship.

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32 Dealing first with the contractual lien, clause 11 grants to the carrier a lien for any amount due under the contract and for the cost of recovering the same. The carrier asserts that clauses 10(b), 17 and Article IV, rule 6, in the events that have occurred, make Baltship and REL liable to it for the amount of the claimed lien. Baltship and REL contend that no amounts arise under these clauses or under Article IV, rule 6, and REL in addition argues that it is not bound contractually to the terms of the ocean bill. 33 Much scholarship and learning have been devoted to the history and nature of maritime claims and liens, and also to the distinction between an action in personam and an action in rem. In England, a view has been expressed as to the artificiality of the distinction of the action in personam and the action in rem: see The Indian Grace No 2 [1998] AC 878 but it is clear that the Act accepts and proceeds upon the basis that the distinction is a real one (see the Australian Law Reform Commission Report No. 33,Civil Admiralty Jurisdiction ("the ALRC Report") paras 97-152) and see Comandate Marine Corp v Pan Australia Shipping [2006] FCAFC 192 [108] - [130] per Allsop J, with whom Finkelstein J concurred, and Admiralty Jurisdiction: some basic considerations and some recent Australian cases, paper presented to MLAANZ Sydney, 18 April 2007 by the Honourable Justice James Allsop; see also the discussion of The Indian Grace No 2 in N. Meeson, Admiralty Jurisdiction and Practice, 3rd edn, 3.2-3.10. 34 Mr Thomas, in his book, Maritime Liens, in para 12 describes the maritime lien as: (1) a privileged claim or charge, (2) upon maritime property, (3) for service rendered to it or damage done by it, (4) accruing from the moment of the events out of which the cause of action arises, (5) travelling with the property secretively and unconditionally, and (6) enforced by an action in rem . In paragraphs 12-13 of his book Mr Thomas amplifies these indicia, pointing out that 'privilege' is used in the sense of enjoying a high priority. 35 In paragraph 13(6) he expands upon the last part of the definition, saying: "The inchoate maritime lien is perfected or crystallised by an action in rem .. Under such a proceeding a maritime lienee may cause the incumbranced res to be arrested by an officer of the Admiralty Court and thereafter sold, and with the claim satisfied out of the proceeds of sale. Scott LJ has descried the role of the Admiralty Court in relation to maritime liens as an: '…executive function of arresting and selling the ship, so as to give a clear titled to the purchaser and thereby enforcing distribution of the proceeds amongst the lien creditors in accordance with their several priorities and subject thereto rateably". 36 As an action in rem is one brought against the object or property itself, procedures were developed for the attaching of the writ to the goods themselves: see for example Rule 30 of the Admiralty Rules made under the Act. 37 It can be seen that the jurisdiction of Courts of Admiralty is more extensive than a jurisdiction to deal with maritime liens: see relevantly s4(3), which comprehensively defines "general maritime claims" and s 9, which recognises that claims in personam can be brought in Admiralty in respect of a maritime claim (i.e. general and proprietary) and "on a claim for damage done to a ship". 38 The carrier's argument, as I understand it, is: (1) By virtue of clause 11 of the ocean bill, a contractual lien is created if other clauses make Baltship/REL liable to pay money to the carrier; (2) By virtue of clause 10(b) and or clause 17 of the ocean bill, and or Article IV, rule 6, Baltship/REL are liable to pay money to the carrier; (3) The carrier's claim under clause 11 is a claim arising out of an agreement that relates to the carriage of goods by a ship and hence is a "general maritime claim concerning a ship or other property"; (4) S 17, by referring to "the property", ought not be treated as referring to other property of the owner of the ship, but can include cargo carried; (5) S 17 permits the carrier to proceed in rem against "the property'" i.e. the cargo owned by REL and carried by the ship; (6) Therefore the carrier has a right of action in rem .

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45 It is one thing for a Court to have jurisdiction to deal with a general maritime claim which may or may not be a maritime lien and another for a claim to be a "proceeding on a maritime lien". This led Allsop J to explain that in considering whether the Court has jurisdiction under s 4 of the Act, it is necessary only to look at the nature of the claim, whereas in considering whether a proceeding is a proceeding on a maritime lien it is necessary at a preliminary stage to consider whether the claimed lien exists or is recognised under Australian law: see [131]-[133], The Global Peace. This approach, which I respectfully adopt, requires different consideration to be given to the s 4(3)(f) general maritime claim and to the assertion that the carrier could initiate a proceeding pursuant to s 15. 46 Mr Street argued that it was not appropriate for this Court to determine, on any final basis, the right of his client to assert a lien. He pointed out that to make the declarations sought by REL and Baltship would remove an important right which his client claims to be entitled to, and he submitted that the Court would be very cautious in granting relief that would, in effect, determine matters on a final basis adversely to his client. He drew my attention to the decision of McLelland J in Kolback Securities Ltd v Epoch Mining NZ [1987] 8 NSWLR 533, in which his Honour noted that where the relief sought would, in a practical sense, determine the substantive issues, the Court will give more regard to the risk of doing an injustice: p 536. 47 Mr Roberts submitted that permitting the carrier to arrest the goods and or to assert a lien pending outcome of the proceedings is a most serious burden on his client, since it not only has the result that his client would be left only with a remedy in damages should the lien be found not to exist or not be enforceable against his client, but that remedy may be of little value in circumstances where the carrier has no presence in the jurisdiction. Mr Street argued that if the goods are released to REL it will have no assets to enforce against here should Baltship, a Scandinavian company, be held liable to it. 48 Because there has been no arrest of the vessel, the practice in relation to release of a vessel is not directly relevant. Nevertheless, I gain some guidance from N. Meeson, Admiralty Law and Practice (LLP, 2003) para 4.65: "Property under arrest may not be released unless either the arresting party consents, which will normally only be upon terms that full security is provided for the claim, or the Court orders release. Unlike arrest, the release of a ship from arrest is discretionary. However, the usual practice of the Court is only to order release upon the possession of sufficient security to cover the amount of the claim, plus interest and costs, on the basis of the claimant's best arguable case . The Court may release arrested property without such security being provided, but this is only done in exceptional circumstances, and only where some satisfactory alternative to ordinary security is provided" (emphasis added).

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The Contractual Lien 50 The relevant part of clause 10(1)(b) appears to be "all costs and expenses of…replacing packing due to excepted causes and any extra handling of the cargo" for that reason. 51 The first question is whether it is clear what is meant by 'excepted cause' in clause 10(1)(b), and the next question is what is said to be the excepted cause here. Mr Levingston accepted that the reference to 'excepted causes' could well be to the exceptions in Article IV, rule 2, of the Hague Visby Rules, which by the terms of the ocean bill and by virtue of COGSA apply here. Although not specifically identified by Mr Street (see T65.41, T66.23), three potentially relevant 'exceptions' are: (i) Act or omission of the shipper or owner of the goods, his agent or representative (n) insufficiency of packing (q) any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage. 52 I shall focus solely upon the insufficiency of packing. There is authority for the proposition that the fact that the carrier is aware of the insufficiency in packing will not itself prevent his relying on the exception: Gould v S E Chatham Railway [1920] 2 KB 186 see Carver On Bills & Lading (2nd edn) 9-226; see also Tetley (supra) pp 491-502 and cases J L Lucas Machinery v SS Peter Wesch (1984) AMC 196T SDNY 1984, O'Connell Mckinery v Americana 1986 AMC 2122, 2826-27 and see also J.F. Wilson, Carriage of Goods by Sea (Pearson Longman, 2008) para 10.2.5. 53 Clause 17 focuses on whether the 'container' has been packed by the carrier. Article IV, rule 2 focuses on the 'packing'. There are cases which deal with provision by a carrier of a container which is then filled by the carrier (see p 499 of Tetley) but no case has been brought to my attention which would preclude the carrier arguing that the cradle supplied by Baltship was itself insufficient packing. The JL Lucas Machinery Case is a case in which use of a crate made of soft wood was found inadequate for an ocean voyage, and that was held sufficient to make out a defence of insufficient packing. As Tetley comments at p 499, each claim for insufficient packing must be decided on its own facts. 54 Although there is scope for argument as to its applicability, I am not able to conclude that the carrier's argument is untenable and hence that it must fail. 55 If follows that, at least on the basis of Clause 10(b), the carrier has arguably a claim pursuant to clause 11 and for the cost of replacing the cradles and extra handling of the goods by reason thereof. No issue was made by REL and Baltship as to the quantum of the lien claimed, or its proportion to the goods over which the lien is asserted. 56 There was no answer by Baltship and REL to the carrier's contention that if clause 11 of the ocean bill applied, then the claim fell within s 4(3) of the Act. In Heilbrun v Lightwood PLC [2007] FCA 1518 [27], Allsop J applied the test identified in Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 422-426, namely whether the assertions made by the plaintiff had the legal character of what was contained in s 4(3)(f). In determining this, he applied Samick Lines Co Ltd v Owners of the Antonis P Lemos [1985] AC 711, and Gatoil International Inc v Arkwright Boston Manufacturers Mutual Insurance Co [1985] 255 dealing with analogous provisions, and held that a claim in tort (arising out of a warehousemen driving the vehicle which was to be carried on a sea voyage into a container and damaging the vehicle) was sufficiently connected with the agreement relating to sea carriage, and hence fell within s 4(3)(f). The requirements that the carrier's claim in this matter be connected with the agreement for carriage of goods and that the connection be reasonably direct, are both met here.

[37]

66 The claim to a maritime lien is based on an assertion that Baltship (and hence, the carrier submits, REL) has committed a tort on the high seas by providing to the carrier cradles that were defective in that they were constructed of softwood (and plywood). 67 It will be observed that s 15(2) does not create by its enumeration of liens, a closed category of maritime liens: see The Global Peace per Allsop J at [131] and see S. Hetherington, Annotated Admiralty Legislation (Law Book Co Ltd, 1989) at [A15/1]. I proceed on the basis that if a maritime lien of the kind asserted by the carrier is recognised under Australian law, the absence of specific reference to it in s 15(2) does not preclude reliance on it. Tort on the High Sea 68 Mr Street submitted that "The nature of the defendant's claim in relation to a tort on the high seas for damage done to a ship by the cargo is clearly a claim of a kind falling within Admiralty and Maritime jurisdiction and the defendant submits within S 15": para [7] of defendant's written submissions dated 4 August 2008. Further he submitted that Allsop J's decision in Elbe "supports the existence of the maritime lien in relation to torts on the high seas concerning damage done by a ship". The submissions also referred to Union Steamship Co of NZ v Ferguson (1969) 19 CLR 191 and Nagint v The Ship Regis (1939) 611 CLR 668. Mr Street drew my attention to The William [1871] LR 3 A&E 487, a case in which a maritime lien in respect of cargo carried aboard a wrongdoing ship was not recognised, and see Thomas Maritime Liens para 225,227, but argued that these cases and text do not address a damages maritime lien in respect of damages caused by cargo on the high seas. 69 Whilst it is correct that Allsop J in The Global Peace found that there was a proceeding on a maritime lien, I do not read Allsop J's judgment in Elbe as supporting the existence of the maritime lien arising from a tort on the high seas. At [127] and at [130] his Honour expressly stated that he did not need to decide the point and he said that there were significant obstacles in the path of such a contention. His Honour indicated that in his view, the wording of s 15 i.e. "proceeding on a maritime lien", pointed to a need to determine whether the lien was one recognised under Australian law at the jurisdictional stage (unlike the position with "a claim" used in s 4) for the purposes of granting the Court jurisdiction: [133]-[134]. Allsop J, however, did not need to determine the question, because there were other grounds for a lien that were recognised under Australian law: see [136]. 70 In Nagint, the High Court held that the High Court had jurisdiction to hear a claim by a passenger following capsize of the vessel due to an alleged failure to properly navigate the vessel and in Union Steam Ship, it was held that injury done to a seaman when he fell into the hold of a ship while assisting in removing hatch covers was damage done by a ship within the meaning of the Admiralty Court Act 1961 UK (which was the basis of the jurisdiction through s 2 of the Colonial Courts of Admiralty Act 1890). 71 There is authority for the proposition that a lien over a ship does not give a right to a lien over cargo: The William (supra), The Flora (1866) LR 1A&E 45, and see Thomas para 226, and also for the proposition that there can be no lien on cargo without a right to a lien over a ship. Lord Watson's view at pp 54-55 of Morgan v Castlegate Steamship Company (The "Castlegate") [1893] AC 28 was expressed as follows: "The difficulty which the appellant has to encounter, in this branch of his claim, is to be found in the fact that the Admiralty Court has never recognised the possibility of there being a proper maritime lien upon freight which is not associated with or founded upon a right to proceed in rem against the ship. No process having for its sole object the attachment of cargo in order to enforce a maritime lien for freight can issue from that Court. The warrant to arrest cargo must apparently be accompanied by a warrant to arrest the corpus of the ship; an attachment of the ship being an essential preliminary to the Courts exercising jurisdiction to enforce a proper lien on freight. These circumstances appear to me to necessitate the inference that no claim which cannot be enforced either against the ship or her owners can, according to the practice of the Courts of Admiralty, be attended with a maritime lien upon freight". That passage, and a similar passage in the speech of Lord Herschell LC at p 48, were treated as expressing the common law in Wahono v The Ship MV Yung No 606 [2001] SBHC, High Court of the Solomon Islands. 72 None of these cases deal with damage to the ship by cargo, and the ALRC dealt with the need for any arrest of cargo outside of a maritime lien in terms that have some resonance here. 73 The ALRC Report discusses cargo as the res in [109] - [110] and comments: "There seems virtually no occasion to arrest cargo apart from on a maritime lien, because in most cases the potential plaintiff has a possessory lien . The fact that the way in which such a lien relates to arrest in admiralty is not altogether clear will seldom, if ever, cause concern… Apart from the rarity with which these issues are likely to arise, there could also be difficulties with property owned by a person who is not the shipowner, but who may be liable in respect of the claim" (emphasis added).

[39]

75 I am doubtful that any maritime lien over cargo for a tort on the high seas is known or recognised by Australian law and for the following reasons: (1) There is no express mention in s 4(3) of a general maritime claim for damage done to a ship, but there is an express reference to damage done "by a ship"; (2) S 6 provides that no new liens are created by the Act, and it has been held that the jurisdiction granted by similar Acts is complete: The Heinrich Bjorn (1886) 11 App Cas 270, 278; Shell Oil Co Ltd v The Ship Lastrigioni (1974) 131 CLR 1 per Menzies J, and see [114] of Comandate per Allsop J and cases there cited; (3) S 15, while expressly referring to a lien for damages by a ship does not refer to damage to a ship. S 9, which deals with in personam claims, does refer to "a claim for damage done to a ship". If s 4, s 9 and s 15 are read together, they arguably point to a regime in which the only claims contemplated where damage to a ship is involved are in personam claims (at least unless the claim falls within s 4(3)(f)) and see in particular paras 172, and 179-185 of the ALRC Report; (4) In England, the Administration of Justice Act 1956 s 1(1) gave jurisdiction to the Admiralty Court. Subsection (e) gave the Court jurisdiction to hear and determine "any claim for damage received by a ship " and see now the Supreme Court Act 1981 UK, s 20(1)(d). The Convention Relating to the Arrest of Seagoing Ships 1952 however, did not contain such a provision and hence it has been held no right of arrest is available under that head of jurisdiction: The Escherscheim [1976] 2 Lloyd Rep 1, at p 9 but see Tetley, supra, page 409; (5) Whilst Mr Street has argued that as a matter of logic, our law ought to permit a lien over cargo for damage to a ship, he has referred to no case in which such a claim has been held to constitute a maritime lien under Australian law. English cases in which a conclusion has been reached that damage to a ship established jurisdiction, have been cases in which the relevant legislation referred to damage to a ship: see The Eschersheim , supra, p 9.; Mersey Docks and Harbour Board v Turner The "Zeta" [1893] AC 468 and they are not cases which establish that the claim is a maritime lien - see the discussion of the distinction in Thomas , para 45 and Meeson para 3.2-2.16. 76 Even if there were recognised a lien of the kind based on the tort, it would seem to me necessary to identify: (a) who the tortfeasor is and (b) whether the goods which are claimed to be the subject of the lien are goods owned by the alleged tortfeasor.

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