RELEVANT LEGISLATION
5 Section 14 of the Act provides:
In a matter of Admiralty or maritime jurisdiction, a proceeding shall not be commenced as an action in rem against a ship or other property except as provided by this Act.
6 Section 17 of the Act relevantly provides:
Where, in relation to a general maritime claim concerning a ship or other property, a relevant person:
(a) was, when the cause of action arose, the owner or charterer of, or in possession or control of, the ship or property; and
(b) is, when the proceeding is commenced, the owner of the ship or property;
a proceeding on the claim may be commenced as an action in rem against the ship or property.
(Emphasis added.)
7 Three aspects of s 17 should be noted. First, the section concerns a "general maritime claim". A "general maritime claim" is defined in s 4(3)(a)-(w): see Annexure A. As noted above, the Writ stated that the Court's jurisdiction arose pursuant to ss 17 and 4(3)(f) of the Act.
8 Second, the general maritime claim cannot be at large. Section 17 directs that the general maritime claim must concern "a ship or other property". Third, where in relation to a general maritime claim concerning a ship or other property, a person was the owner of the ship when the proceeding was commenced or the owner or charterer of or in possession of the ship when the cause of action arose, a proceeding on the claim may be commenced as an action in rem against the ship or other property.
9 It was common ground that Transfield (as the arresting party) bore the onus of establishing on the balance of probabilities that the Court had jurisdiction under the Act: Nautilus Australia Ltd v The Ship 'Rossel Current' [1999] QSC 39 at [12].
10 As the Full Court of the Federal Court stated in Opal Maritime Agencies Pty Ltd v The Proceeds of Sale of the Vessel MV 'Skulptor Konenkov' (2000) 98 FCR 519 at [40]-[42] and [46]-[50]:
40 … Section 17 is concerned with giving a right to proceed by an action in rem against a particular ship on a general maritime claim concerning that ship, where there is a person who would be liable on that claim in a proceeding commenced as an action in personam against that person and the conditions in paragraphs 17(a) and (b) are satisfied. The cause of action referred to in s 17(a) is the cause of action in respect of the claim on which the relevant person would be liable in any in personam proceedings.
41 For an action in rem to be commenced against a ship, it is not sufficient that the ship is the property of a person who would be liable on an action in personam on a general maritime claim concerning a ship. The ship against which it is sought to commence in rem proceedings must also be the ship in respect of which the general maritime claim is made. The policy recommendation of the Australian Law Reform Commission (the ALRC) in its Report on Civil Admiralty Jurisdiction and draft Admiralty Bill accompanying the report, which included cl 17 in the form of the present s 17 of the Act, was that the nexus between the ship in respect of which the claim arose, and the ship which may be proceeded against in rem, remain: see Australian Law Reform Commission, Civil Admiralty Jurisdiction, Report No 33 (1986) [(the ALRC Report)], pars 124-125, 136.
42 In coming to the view which it did, the ALRC accepted the approach taken by the House of Lords in The "Eschersheim" [1976] 1 WLR 430. The leading opinion of the House was given by Lord Diplock with whom the other Law Lords who heard the appeal agreed. At issue was the proper construction of s 1(1) of the Administration of Justice Act 1956 (UK) (the 1956 UK Act) which Act implemented as part of the domestic law the treaty obligations of the United Kingdom under the International Convention Relating to the Arrest of Seagoing Ships signed at Brussels on 10 May 1952 (the Arrest Convention).
…
46 Lord Diplock outlined the purpose and effect of the Arrest Convention in The "Eschersheim". He said (at 434-435):
"The purpose of that Convention was to provide uniform rules as to the right to arrest seagoing ships by judicial process to secure a maritime claim against the owner of the ship. Article 1 defined by reference to their subject matter various classes of maritime claim in respect of which alone a right of arrest was to be exercisable; while articles 2 and 3 granted and confined the right of arrest to either (a) the particular ship in respect of which a maritime claim falling within one or more of those classes arose or (b) any other ship owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship.
The provisions of article 3 represented a compromise between the wide powers of arrest available in some of the civil law countries (including for this purpose Scotland) in which jurisdiction to entertain claims against a defendant could be based on the presence within the territorial jurisdiction of any property belonging to him, and the limited powers of arrest available in England and other common law jurisdictions, where the power to arrest was exercisable only in respect of claims falling within the Admiralty jurisdiction of the court and based upon a supposed maritime lien over the particular ship in respect of which the claim arose."
47 As to its implementation by the 1956 UK Act, his Lordship said (at 435):
"The way in which the draftsman of Part I of the Administration of Justice Act set about his task of bringing the right of arrest of a ship in an action in rem in English courts into conformity with article 3 of the Convention was (a) by section 1 of the Act, to substitute a fresh list of claims falling within the Admiralty jurisdiction of the High Court, and (b) by section 3, to regulate the right to bring an action in rem against a ship by reference to the claims so listed. […]"
48 As to the operation of ss 1(1) and 3(4) of the 1956 UK Act, his Lordship said (at 436-437):
"It is clear that to be liable to arrest a ship must not only be the property of the defendant to the action but must also be identifiable as the ship in connection with which the claim made in the action arose (or a sister ship of that ship). The nature of the 'connection' between the ship and the claim must have been intended to be the same as is expressed in the corresponding phrase in the Convention 'the particular ship in respect of which the maritime claim arose'. One must therefore look at the description of each of the maritime claims included in the list in order to identify the particular ship in respect of which a claim of that description could arise."
49 Professor Berlingieri in his commentary on the Arrest Convention, expressed the view that the decision of the House of Lords in The "Eschersheim" reiterated the fundamental rule for the arrest of a ship under the provisions of the Arrest Convention. That was that the right to arrest existed only if the claim arose in respect of a "particular ship" and the owner was liable in respect of a maritime claim relating to that ship (p 59).
50 It was the requirement that there must exist a relationship between the claim and a particular ship which led Professor Berlingieri to conclude (p 59):
"Claims against a shipowner that relate to the maintenance and operation of his ships, but which are not related to a particular ship, cannot be secured by means of the arrest of one of the ships owned by him. If, for example, the owner purchases stores or spare parts for his fleet and uses them for one or more of his ships when the need arises, the claim of the supplier for the payment of such spare parts or stores has not arisen in respect of a particular ship. The same situation would exist in the case of a contract for the lease by a shipowner of a number of containers to be used on board the container ships he operates and of a contract of affreightment, when the ships to be employed by the owner for the carriage of the agreed tonnage of cargo are not specified and the owner does not perform the contract ..."
(Emphasis added.)
11 The Full Court then addressed the applicability of those principles to the Act. The Court concluded that the reasoning in The 'Eschersheim' [1976] 1 WLR 430 as to the need for the relationship between claims and particular ships is applicable to all heads of claim under s 4(3) of the Act: The 'Skulptor Konenkov' 98 FCR 519 at [51]. Indeed, the Full Court went so far as to say that "the nature of the connection between the claim and the ship which it is sought to arrest as described in The 'Eschersheim' must exist for the purposes of s 4(3), s 17 and s 19 of the Act": at [53].
12 The basis for that conclusion was that (1) the requirement and its application across all classes of maritime claims had been accepted by the ALRC Report and draft legislation (see ALRC Report at para 151 fn 27, 28; paras 125-6) and (2) the Australian Parliament had enacted the draft as the Act: The 'Skulptor Konenkov' 98 FCR 519 at [52]-[53].
13 The Full Court summarised the position in The 'Skulptor Konenkov' 98 FCR 519 at [54] as follows:
Sections 17 and 19 respectively prescribe the conditions to be satisfied before a proceeding on the claim concerning a ship may be commenced as an action in rem against the ship or against another ship. In respect of each section the claim is limited to a claim concerning the ship identified by the section as being the relevant ship which is the subject of the claim. The type of claim which falls within the description of a general maritime claim is determined by the operation of s 4(3) of the Act. Section 4(3) defines in paragraphs (a) to (w) inclusive the claims which satisfy the requirement of being, for the purposes of ss 17 and 19, a general maritime claim.
(Emphasis added.)
14 The issue here was whether the claim advanced by Transfield (as founding jurisdiction) was a claim which fell within s 4(3)(f) of the Act. What then was the claim?