FEDERAL COURT OF AUSTRALIA Incitec Ltd v Alkimos Shipping Corporation [2004] FCA 348 ADMIRALTY – procedure – service ex juris INCITEC LTD v ALKIMOS SHIPPING CORPORATION AND ANOR N 303 of 2003 SUMITOMO AUSTRALIA LTD v ALKIMOS SHIPPING CORPORATION N 304 of 2003 ALLSOP J 23 MARCH 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 303 of 2003 BETWEEN: INCITEC LTD PLAINTIFF AND: ALKIMOS SHIPPING CORPORATION FIRST DEFENDANT HYUNDAI MERCHANT MARINE CO LTD SECOND DEFENDANT JUDGE: ALLSOP J DATE: 23 MARCH 2004 PLACE: SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 304 of 2003 BETWEEN: SUMITOMO AUSTRALIA LTD PLAINTIFF AND: ALKIMOS SHIPPING CORPORATION FIRST DEFENDANT JUDGE: ALLSOP J DATE OF ORDER: 23 MARCH 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Stand the matters over for the making of orders. 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 N 303 of 2003 BETWEEN: INCITEC LTD PLAINTIFF AND: ALKIMOS SHIPPING CORPORATION FIRST DEFENDANT HYUNDAI MERCHANT MARINE CO LTD SECOND DEFENDANT JUDGE: ALLSOP J DATE: 23 MARCH 2004 PLACE: SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 304 of 2003 BETWEEN: SUMITOMO AUSTRALIA LTD PLAINTIFF AND: ALKIMOS SHIPPING CORPORATION FIRST DEFENDANT JUDGE: ALLSOP J DATE: 23 MARCH 2004 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me two applications for service ex juris under Order 8 of the Federal Court Rules. They are matter number N303 of 2003, Incitec v Alkimos Shipping Corporation and Another and matter number N304 of 2003 Sumitomo Australia Ltd v Alkimos Shipping Corporation. These reasons apply to both matters. 2 The applicant for service outside jurisdiction is the first defendant, Alkimos Shipping Corporation. It is sued in each matter as the carrier and first defendant. There was one voyage of the ship The Alkimos in which two relevant cargoes of fertiliser were carried for the two respective plaintiffs, Incitec and Sumitomo. The cargoes were shipped on board the vessel in Tampa, Florida and were shipped under bills of lading dated 13 February 2002 in both instances. 3 Both cargoes, upon arrival in Newcastle, New South Wales in Australia, were rejected after the Australian Quarantine Inspection Service (AQIS) found, upon a visual inspection, grain in all relevant holds. The presence of foreign grain or grain in a foreign ship, in particular carrying fertiliser, is alleged by the plaintiff, and there is no contest in the primary suit, to be a matter, which AQIS views as a serious risk in relation to the introduction into Australia of a disease presently not found in Australia called Karnal Bunt. The phosphate fertiliser on board The Alkimos was rejected and could not be unloaded in Australia. The vessel carried the cargo first thereafter, apparently, to Bangladesh and later unloaded it in Indonesia. 4 The plaintiffs in both proceedings complained as to the loss each has suffered by these events. In the Incitec matter, Incitec was the owner of the fertiliser and the voyage charterer of the vessel. There is also a time charterer in the Incitec matter, that is, the second defendant Hyundai Merchant Marine Co Ltd. In the Sumitomo matter, only Alkimos is sued by the plaintiff, Sumitomo, which was the owner of the cargo. 5 The carrier first defendant is sued in the usual way, if I may put it in that fashion without disrespect to the pleader of the statement of claim: in contract under the bills, in bailment and in tort. The first defendant wishes to join the surveyor company on a cross-claim for contribution. The surveyor undertook the pre-loading and post-loading inspection in Tampa, Florida shortly prior to 13 February 2002. On the evidence filed I am satisfied that an officer employee or agent of the prospective second cross-defendant, Intertek Caleb Brett USA, Inc., undertook those inspections. 6 The evidence before me indicates that the surveyor examined holds 1 to 5 in site inspections, which would indicate a comprehensive passing of the vessel to carry the cargo. The post-loading inspection has a certification of the nominated surveyor that it was certified that he carried out the pre-load and post-load vessel cleanliness inspection surveys as per the FIFA hold cleanliness checklist and guidelines. Dr Bell puts to me, and I accept for the purposes of the application, that FIFA stands for the Fertiliser Industry Federation of Australia. 7 On the same page signed by the servant or agent of the prospective cross-defendant the inspection was set to mirror the AQIS inspection in Australia. I am satisfied with that material and from what I am prepared to infer from common commercial knowledge that a surveyor would either be aware of AQIS requirements for inspection, or well ought know such requirements. 8 Exhibit A on the motion was a statement of a Mr Bignell, filed in the main proceedings on behalf of the plaintiff. Mr Bignell is an officer of AQIS. In that statement it can be seen that without apparent trouble or difficulty the visual inspection of the holds while the vessel was off the port of Newcastle revealed grain residue in the holds in question. Unanswered, that material gives rise to a prima facie case that the inspection in Tampa was not made with reasonable care, thereby creating a ground for contribution. 9 That is not a final finding. It goes without saying this is an ex parte application and the surveyor has not had an opportunity to meet any of the allegations in the proposed cross-claim; but I am satisfied on the material before me that the applicant for service, the first defendant in each case, has demonstrated a sufficiently strong prima facie case to warrant the exercise of discretion under Order 8 of the Federal Court Rules to grant leave to serve outside the jurisdiction, in particular, by reference to Order 8 rule 1(d). 10 I will not make any orders now but I will make orders in Chambers in appropriate form. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop . Associate: Dated: 14 April 2004 Counsel for the First Defendant/ Defendant: Dr A. Bell Solicitor for the First Defendant/ Defendant: Middletons Lawyers Date of Hearing: 23 March 2004 Date of Judgment: 23 March 2004