Pacific Composites Pty Ltd & Anor v Transpac Container System Ltd (carrying on business as Blue Anchor Line) & Ors [1998] FCA 1215

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 377 of 1996

IN ADMIRALTY

BETWEEN: PACIFIC COMPOSITES PTY LTD

(can 005 952 698)

First pLAINTIFF

LEMARNE CORPORATION LIMITED

(can 004 834 584)

Second PLAINTIFF

AND: TRANSPAC CONTAINER SYSTEM LIMITED carrying on business as BLUE ANCHOR LINE

First DEFENDANT

ANL LIMITED

(can 008 654 206)

Second DEFENDANT

UNITED ARAB SHIPPING COMPANY (S.A.G.)

Third DEFENDANT

JUDGE: TAMBERLIN J

DATE OF ORDER: 25 SEPTEMBER 1998

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The first defendant pay the first plaintiff's costs on a party-party basis. 2. The application for indemnity costs is dismissed. 3. The first plaintiff pay the first defendant's costs of this application for indemnity costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 377 of 1996

in admiralty

BETWEEN: PACIFIC COMPOSITeS PTY LTD

(ACN 005 952 698)

First plaintiff

LEMARNE CORPORATION LIMITED

(ACN 004 834 584)

Second plaintiff

AND: TRANSPAC CONTAINER SYSTEM LIMITED

carrying on business as BLUE ANCHOR LINE

First defendant

ANL LIMITED

(ACN 008 654 206)

Second defendant

UNITED ARAB SHIPPING COMPANY (S.A.G.)

Third defendant

JUDGE: TAMBERLIN J

DATE: 25 september 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT On 11 May 1998 I gave judgment in this matter in favour of the plaintiff ("Pacific") in the sum of AUD38,570 together with interest and costs. Pacific now applies to the Court for an order that the first defendant ("BAL") pay Pacific's cost on an indemnity basis from the date of the letter of offer, sent by Pacific on 10 December 1996. It also seeks an order that BAL pay the costs of Pacific in respect of the proceedings against the second defendant ("ANL"), including the cost of ANL which Pacific agreed to pay in discontinuing proceedings against ANL. Pacific says that it is entitled to costs on an indemnity basis because on 10 December 1996 it wrote a letter making an offer of settlement in an amount of $32,000 plus costs, when in fact, the amount of the judgment, including interest, is substantially in excess of that amount. The letter sent by Conway O'Reilly, solicitors for Pacific, on 10 December 1996 reads: "WITHOUT PREJUDICE Dear Sirs PACIFIC COMPOSITES PTY LIMITED & ANOR V BLUE ANCHOR LINE & ORS We refer to previous correspondence in this matter. In particular we refer to the Statement of Gerd Ramming, filed on behalf of the First defendant in these proceedings. The assertions in paragraphs 14 and 15 of that statement reveal that the Bill of Lading issued by the First Defendant was issued fraudulently. As a consequence, the Plaintiffs suffered the loss, the subject of these proceedings. In light of this new evidence as to the cause of the loss, we request that you seek your client's instructions as to settling this matter. Our client claims the amount of $38,570.12 plus interest on the loss to date, calculated at the rate of 12% p.a., which amounts to $5,756.99. On a without prejudice basis, except as to costs, we are instructed to offer to settle this matter for a sum of $32,000.00 plus costs. If the matter does not settle on the above basis and the Court awards a judgment sum in excess of the sum sought, we will seek costs on an indemnity basis as from today's date. This offer will be expire at 5 p.m. on Friday, 27 December 1996, unless withdrawn prior to that time. We look forward to receiving your response. Yours faithfully CONWAY O'REILLY"