Re Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1992] FCA 476; - FCA 1992 case summary — Zoe

[23]

. a claim may relate to possession of a ship or to title to or

ownership of a ship within the meaning of s. 4(2)(a) of the Act

where the source of the entitlement upon which the claim rests is

a beneficial interest in the ship which is asserted by the

claimant. Whereas here the beneficial interest in a ship is

divided between two parties, one of whom is also the registered

owner, then a dispute between them may give rise to a claim

between co-owners within the meaning of s. 4(2)(b). His Honour

rejected the submission of YSL that, whilst there may be an action

by Empire for damages for breach of contract, there is no

proprietary maritime claim in respect of the ship.

. The correct approach to be taken in Australia in admiralty

matters, where a motion is brought to set aside the writ on the

ground that the Court has no jurisdiction in the matter, is that

the plaintiff (Empire) has the burden of establishing on the

motion that there is a strong argument for the conclusion that the

Court has jurisdiction.

. By applying that test, Empire had shown a strong argument for the

existence of the Court's jurisdiction in respect of a matter of a

kind mentioned in s. 76(iii) of the Constitution. There are

various other elements forming the substantial subject matter of

the controversy between the parties; and, as a question of

jurisdiction, whatever the position on the merits, the claims by

Empire against YSL in respect of those further elements would fall

within the accrued or pendent jurisdiction of the Court.

. The use of the expression "admiralty and maritime jurisdiction" in

s. 76(iii) of the Constitution obviates argument that the power of

the Parliament is restricted to the jurisdiction of the High Court

of Admiralty in England at any particular time. This provision

extends to empower the Parliament to make laws conferring

jurisdiction with respect to "matters" arising out of

controversies relating to or dealing with the commerce or

navigation of the sea, including the means by which or with the

assistance of which those activities are or may be conducted.

Parties

Applicant/Plaintiff:

# Re Owners of the Ship "Shin Kobe Maru"

Respondent/Defendant:

Empire Shipping Company Inc \[1992\] FCA 476;

Legislation Cited (10)

Colonial Courts of Admiralty Act 1890

Australia Constitution Act 1901

Supreme Court Act 1981

Merchant Shipping Act 1894

Shipwrecks Act 1976

Seamen's Compensation Act 1911(Cth)

Sea (Civil Liability) Act 1981(Cth)

Admiralty Act 1973

Registration Act 1981

Administration of Justice Act 1956

Cases Cited (24)

Re Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1992] FCA 476; (1992) 110 ALR 463 (1992) 38 FCR 227 (23 September 1992)

This is an appeal by leave from an order made by Gummow J. on 28 October 1991 (reported [1991] FCA 499; (1991) 104 ALR 489) refusing to strike out a claim brought by the plaintiff as a proprietary maritime claim under the Admiralty Act 1988 (Cth).

"What is asserted for Empire is a joint activity

carried out through the medium of joint

beneficial ownership of an asset, the legal

title to which was, pursuant to the JVA,

retained in Seven Seas. The shares in that

company were held by UTI, a company itself with

a share capital divided equally between Empire

and YSL. The further contention of Empire is

that even though the Ship was transferred to the

Japanese flag and YSL became the owner pursuant

to the 1984 Agreement, nevertheless the joint

beneficial ownership between YSL and Empire

continued. The Basic Agreement, the JVA and the

1984 Agreement, even without reliance upon the

evidence of Mr Lieu as to the understanding upon

which he agreed to the flag transfer to YSL in

1984, provide a strong argument in support of

the contentions of Empire. To reach that

conclusion is not to deny the efficacy of the

corporate structure the parties established in

various jurisdictions. Article 4 of the JVA

shows that YSL and Empire reserved to themselves

the manner of disposition of that Ship by Seven

Seas and proceeds of sale were for division by

YSL and Empire.

The terms on which the parties held the joint

beneficial ownership asserted by Empire appear

from the arrangements made between it and YSL.

... Again, article 4 provides that if the Ship

is lost or becomes a constructive total loss

'both parties shall cause (Seven Seas) to . . .

pay outstanding loan (sic)' in respect of the

Ship such that the amount will be borne equally

'among both parties' and any surplus shall be

divided 'equally between both parties'.

A mortgage over the Ship to BOA was discharged

on 24 July 1987. In the submission of Empire,

article 4 of the 1984 Agreement then came into

operation. The result is said to be that YSL is

obliged to have the Ship bought back by Seven

Seas or another joint venture company jointly

and equally owned by YSL and Empire, at a price

representing the book value in the hands of YSL

17. Empire's claim relates both to title and to ownership in this sense. As to the words "relating to" see Gatoil International Inc v. Arkright-Boston Manufacturers Mutual Insurance Co [1984] UKHL 8; (1985) AC 255; Hatfield v. Health Insurance Commission (1987) 77 ALR 103.

25. This aspect of the case was dealt with fully by Gummow J., with whose observations I agree. In the 1900's in the United Kingdom, the jurisdiction of the Courts of Admiralty and then of the Admiralty Division of the High Court of Justice was a developing not a static jurisdiction. Moreover, the Australian Constitution adopted the term "admiralty and maritime jurisdiction" which appeared in Art. III s.2(1) of the Constitution of the United States, the ambit of which had been expounded by Story J. in De Lovio v. Boit (1815) 7 Fed Cas 418. The use of the term "maritime" was significant. Thus, in John Sharp and Sons Ltd v. The Ship Katherine Mackall [1924] HCA 37; (1924) 34 CLR 420 at 428, Isaacs J. said:-

The power granted by s.76(iii) of the Constitution is a grant of plenary legislative power to be construed "with all the generality which the words used will admit" and as "wide enough to be capable of flexible application to changing circumstances". See Bourke v. State Bank of New South Wales [1990] HCA 29; (1990) 170 CLR 276 at 284 and The Commonwealth v. Tasmania [1983] HCA 21; (1983) 158 CLR 1 at 127-8, 220-1, 254-5; Lansell v. Lansell [1964] HCA 42; (1964) 110 CLR 353 at 366-7; Australian National Airways Proprietary Limited v. The Commonwealth [1945] HCA 41; (1945) 71 CLR 29 at 81. As Sir Owen Dixon said arguendo in The Katherine Mackall at 424:-

(1992) 110 ALR 463

(1992) 38 FCR 227

(1985) 159 CLR 22

(1987) 77 ALR 103

(1990) 170 CLR 276

(1983) 158 CLR 1

(1992) 32 FCR 78

(1974) 131 CLR 1

(1957) 2 FLR 219

(1979) 145 CLR 172

(1976) 134 CLR 495

(1945) 70 CLR 175

(1991) 104 ALR 489

(1924) 34 CLR 420

(1964) 110 CLR 353

(1945) 71 CLR 29

(1908) 6 CLR 309

(1983) 153 CLR 297

Re Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1992] FCA 476;

At a glance

Court

Decision date

Before

Source

Judgment (69 paragraphs)

Parties

Legislation Cited (10)

Cases Cited (24)

Re Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1992] FCA 476; (1992) 110 ALR 463 (1992) 38 FCR 227 (23 September 1992)