FEDERAL COURT OF AUSTRALIA Associated Packaging Pty Limited v Lloyd Triestino Di Navigazione S.P.A. [2005] FCA 1631 Associated Packaging Pty Limited v Lloyd Triestino Di Navigazione S.P.A. NSD 71 of 2005 ALLSOP J 4 NOVEMBER 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 71 of 2005 ADMIRALTY BETWEEN: ASSOCIATED PACKAGING PTY LIMITED PLAINTIFF AND: LLOYD TRIESTINO DI NAVIGAZIONE S.P.A. FIRST DEFENDANT SAMUDERA SHIPPING LINES (PTE) LTD SECOND DEFENDANT JUDGE: ALLSOP J DATE OF ORDER: 4 NOVEMBER 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: SERVICE EX JURIS ORDERS 1. Leave be granted to the First Defendant to file a Cross Claim against Advance Container Lines Pte Ltd on or before 9 November 2005. Such leave is granted subject to perusal of the Third Party Claim on Advance Container Lines Pte Ltd, to be provided prior to 4:00pm on 8 November 2005. 2. The First Defendant provide by email a copy of the proposed Cross Claim against Advance Container Lines Pte Ltd to the Associate to Justice Allsop prior to 4:00pm on 8 November 2005. 3. Leave be granted to the First Defendant to serve the Cross Claim on Advance Container Lines Pte Ltd outside the Commonwealth of Australia. 4. Service of the originating process and a copy of all existing pleadings in these proceedings on Advance Container Lines Pte Ltd is to be effected no later than 18 November 2005 and that the Cross Claim is to be returnable at 9:30am on 16 December 2005. 5. Service of the Cross Claim be effected on Advance Container Lines Pte Ltd by leaving copies of the Cross Claim and these orders with some person, apparently an officer of Advance Container Lines Pte Ltd, and apparently of or above the age of 16 years: (1) at the office of Advance Container Lines Pte Ltd, registered according to the laws of Singapore as being the place at which documents may be served upon Advance Container Lines Pte Ltd; or (2) if there is no such registered office, at the principle place of business or the office of Advance Container Lines Pte Ltd. 6. The costs of the First Defendant's notice of motion dated 19 October 2005 and of the mediation be reserved to the trial judge, or some other judge, at the conclusion of the proceedings. PROCEDURAL ORDERS 7. Within four weeks the Second Defendant by a proper officer with knowledge of the claim and the investigations is to file and serve an affidavit setting out in full the facts, matters and circumstances upon which the Second Defendant will seek to rely in either: (1) discharge of its onus of proof as a bailee that it took reasonable care and custody of the goods and (2) the evidence which it would seek to lead in a case that it exercised due diligence in making the ship seaworthy for the reception of cargo and otherwise in compliance with its obligations if it had obligations under article 3 of the Hague Rules or the Hague-Visby Rules. 8. The Second Defendant file and serve its defence on or before 2 December 2005. 9. The Plaintiff to provide an indexed bundle of discovered documents, but not sworn discovery, which it says proves title to sue and a summary of its proposed oral evidence by 2 December 2005. 10. The First Defendant file and serve its defence prior to 16 December 2005. 11. The proceedings be listed for further directions at 9:30am on 16 December 2005. 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 NSD 71 of 2005 ADMIRALTY BETWEEN: ASSOCIATED PACKAGING PTY LIMITED PLAINTIFF AND: LLOYD TRIESTINO DI NAVIGAZIONE S.P.A. FIRST DEFENDANT SAMUDERA SHIPPING LINES (PTE) LTD SECOND DEFENDANT JUDGE: ALLSOP J DATE: 4 NOVEMBER 2005 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this matter, the plaintiff has joined two parties in relation to a small cargo claim. The goods were 160 bales of hessian bags loaded on board the vessel Sinar Java at the Port of Kolkata in India for shipment to Sydney. The goods were transhipped in Singapore on board the ship Magnavia. 2 It is agreed, at least between the present parties to the proceedings, that the damage to the goods occurred during the first leg of the voyage to Sydney, that is, on the voyage on Sinar Java to Singapore. 3 The first defendant is the issuer of a bill of lading. There is no dispute between the present parties that Lloyd Triestino is the party to the bill as contractual carrier. 4 The goods were damaged on the Kolkata to Singapore leg. The owner of the vessel carrying the goods on that leg is the second defendant. The first defendant is the owner of the vessel which carried the goods from Singapore to Sydney. The first defendant which had issued the bill had a contractual arrangement on the first leg with a party called Advance Container Line (Pte) Ltd ("ACL"), a Singapore company. The contract was called a connecting carrier agreement. 5 This matter came into the list earlier this year. It is a small claim, together with interest of no more than $40,000-odd. After some early orders for case management, I ordered the matter by consent to go to mediation before a Registrar. That mediation failed. After the mediation failed, the first defendant indicated that it wished to join ACL as a third party in effect to suing upon the connecting carrier agreement which it had with ACL. 6 The first defendant says that ACL is contractually liable to indemnify it for liabilities it undertook or was subject to relevantly here on the first leg of the voyage. ACL pursuant to its own arrangement with the second defendant, Samudera Shipping Line (Pte) Limited arranged for the second defendant to undertake the actual carriage of that first leg. 7 The bill issued by Lloyd Triestino, the first defendant, contained a clause in permitting subcontracting and providing for a forbearance to sue. That may mean that the plaintiff in its action against the second defendant has difficulties in succeeding. However, a number of issues will arise about that. First, whether the second defendant has any entitlement to protections under the bill either by way of an application of a Himalaya clause giving it the benefit of a forbearance to sue clause, or by reference to being entitled to Hague Visby protection either because the bill was subject to Indian law or by reason of the application of Elder Dempster v Zochonis [1924] AC 522. In any event, some difficult questions may arise as a matter of law about the liability of the second defendant. 8 The first defendant as contractual carrier had responsibilities under the relevant Hague-Visby regime. The plaintiff will need to prove its entitlement to recover against the first defendant. However, depending on the facts, matters and circumstances concerning the damage to the goods, that difficulty for the plaintiff may be more apparent than real. 9 The context about the joinder has arisen because of the fact that a mediation was undertaken by the plaintiff and the second defendant without apparent knowledge of the potential liability of another party. It may be that the costs of the mediation have been wasted. I am not in a position to assess whether that is the case yet. 10 There is a prima facie case made out against ACL by the first defendant in the evidence led before me in terms of the agreement between the parties should the first defendant be liable. I propose to permit, subject to a properly framed cross-claim being drafted, a cross-claim to be served outside the jurisdiction against ACL by the first defendant. 11 The question of the costs of this motion and the costs of the mediation will be a separate matter to be determined either by the trial judge or by another judge after the resolution of the proceedings. This is not a condition of the leave. It is a statement. The mediation was a court ordered mediation and the costs expended by the parties in relation thereto are within the control of the Court. 12 The matter now needs to be attended to for the purposes of a hearing. It may settle, but given that one mediation has failed, the best course in my view is to have this matter move onto a hearing as reasonably quickly as possible without doing injustice to any party. 13 I do not propose to permit the joinder of ACL to slow down the plaintiff's progress to a trial. However, given the anticipated issues between the first defendant and ACL, and depending on ACL's attitude, delay is unlikely to occur. 14 A number of matters need to be attended to. This is because I have not made formal directions yet because I was keen to have the matter resolved at a case management conference or at a mediation if that were possible. Unfortunately, that is not the case and therefore the formalities of preparation need to be attended to. 15 The first thing that needs to be sorted out is whether or not there is any real factual debate about responsibility for damage. That is whether subject to issues such as title to sue, any time bar and the forbearance to sue clause, it is contested that the carrier is liable in the amount claimed. 16 The first order that I propose is that within four weeks the second defendant by a proper officer with knowledge of the claim and the investigations is to file and serve an affidavit setting out in full the facts, matters and circumstances upon which the defendant will seek to rely in either: (1) discharging its onus of proof as a bailee that it took reasonable care and custody of the goods and (2) the evidence which it would seek to lead in a case that it exercised due diligence in making the ship seaworthy for the reception of cargo and otherwise in compliance with its obligations, if it had obligations, under Article 3 of the Hague Rules or the Hague-Visby Rules and within that same period of four weeks, the second defendant file and serve its defence. 17 Within that same period of four weeks, the plaintiff is to provide an indexed bundle of documents, not a discovery list sworn but an indexed bundle of documents which it says proves its title to sue, together with a summary of any oral evidence to be led in relation to that issue. 18 Two weeks thereafter the first defendant is to file its defence. The matter is in the list for directions with ACL on Friday, 16 December 2005. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 22 November 2005 Counsel for the plaintiff: C Keane Solicitor for the plaintiff: Norman Waterhouse Counsel for the first defendant: E Cox Solicitor for the first defendant: Ebsworth & Ebsworth Counsel for the second defendant: R Wilson Solicitor for the second defendant: Norton White Date of Hearing: 4 November 2005 Date of Judgment: 4 November 2005