FEDERAL COURT OF AUSTRALIA Gruppo Mastrotto SPA v Jet Air Service SPA [2007] FCA 1280 GRUPPO MASTROTTO S.P.A. AND NSW LEATHER CO PTY LIMITED v JET AIR SERVICE S.P.A. AND JAS FORWARDING WORLDWIDE PTY LIMITED NSD2353 OF 2006 ALLSOP J 17 AUGUST 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD2353 OF 2006 BETWEEN: GRUPPO MASTROTTO S.P.A. First Plaintiff NSW LEATHER CO PTY LIMITED Second Plaintiff AND: JET AIR SERVICE S.P.A. First Defendant JAS FORWARDING WORLDWIDE PTY LIMITED Second Defendant JUDGE: ALLSOP J DATE OF ORDER: 17 AUGUST 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The first defendant be granted leave to file and serve the cross-claim on General Export SRL, being a party outside Australia, in the form of Annexure A to the affidavit of Stuart James Clarke Windybank sworn 19 July 2007. 2. Service may be effected by lawyer or private agent in Italy, or in a manner not otherwise contrary to Italian law. 3. Service of the cross-claim is to be accompanied by service of the application, statement of claim and amended defence in English and in certified Italian translations. 4. Service of the documents is also to be accompanied by a copy of these orders in English and certified Italian translations, and a settled copy of these reasons. 5. The cross-claim be stood over for directions to 16 November 2007 at 4:15 pm. 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 NSD2353 OF 2006 BETWEEN: GRUPPO MASTROTTO S.P.A. First Plaintiff NSW LEATHER CO PTY LIMITED Second Plaintiff AND: JET AIR SERVICE S.P.A. First Defendant jas forwarding worldwide pty limited Second Defendant JUDGE: ALLSOP J DATE: 17 AUGUST 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this matter, the first defendant seeks an order under Order 8 of the Federal Court Rules for service outside the Commonwealth of Australia, in Italy. The cross-claim which is sought to be served outside the jurisdiction arrises in this way. The first plaintiff, Gruppo Mastrotto, an Italian company, sought to export hides to Australia to the second plaintiff, NSW Leather Co Pty Limited. To effect that commercial purpose, it entered into a bill of lading with the first defendant. Gruppo Mastrotto was named on the bill of lading as shipper and NSW Leather Co as consignee. 2 The first defendant, Jet Air Service SPA, is a freight forwarder which was undertaking independent obligations as carrier by entering into the bill of lading. The first defendant, in order to carry out its obligations under its bill, entered another bill with the prospective cross-defendant, General Export SRL, another Italian company with an address in Livorno. General Export identified itself on the bill as an NVOCC (a Non-Vessel Owning Common Carrier), with the first defendant identified incorrectly, but clearly, as the shipper (JAS SPA Milan, Italy). The consignee was identified as JAS Forwarding Worldwide Pty Limited, being an Australian subsidiary of the group of which the defendant is part. JAS Forwarding Worldwide is the second defendant, against whom proceedings have now been discontinued. 3 It should be noted that in clause 19 of that General Export bill there was provision that: Actions against the carrier may be instituted only in the court or the town where the carrier has his place of business as stated on the reverse of this bill and shall be decided according to the law of the country in which the place of business is situated. 4 There is no town on the reverse of the bill, but there is a town on the face of the bill, which I take to be the town referred to in clause 19, that is, Livorno. 5 The claim against the first defendant arises out of damage to the hides which occurred by the fumigation of the hides in Italy with methyl bromide causing significant, if not fatal, damage to the consignment as a commercial consignment. The plaintiffs complain, not surprisingly, about this state of affairs. They have not sued General Export by reason of a term of its bill of lading with the first defendant which contains a restriction on the plaintiffs being able to sue General Export. 6 The gist of the complaint by the first defendant against the cross-defendant, which has now been made clear in evidence before me in the affidavits of Mr Windybank, is that without instructions and, indeed, perhaps contrary to instructions, the cross-defendant fumigated the hides without the knowledge of the first defendant. That is perhaps an imprecise summary of the claim, but it suffices to understand that the first defendant, in effect, blames the cross-defendant for the inappropriate fumigation of the hides. There is an adequate basis on the evidence to think that there is a prima facie case and there are a number of grounds upon which it is appropriate to join the cross-defendant, not least of which is item 15 in Order 8 rule 2 of the Federal Court Rules and arguably also items 3 and 12. It is sufficient, however, to identify for present purposes, item 15. That is: Proceedings seeking contribution or indemnity in relation to a liability enforceable by a proceeding in the Court. 7 The question of the exclusive jurisdiction clause is dealt with, it seems to me, at least arguably, by the operation of s 11 of the Carriage of Goods by Sea Act 1991 (Cth) which relevantly is in the following terms in subsection 2: s 11 Construction and jurisdiction … (2)An agreement (whether made in Australia or elsewhere) has no effect so far as it purports to: … (c) preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory in respect of: (i) a sea carriage document relating to the carriage of goods from any place outside Australia to any place in Australia. … 8 If there is any argument that that provision does not apply by reason of the nature of the claim against the cross-defendant, the cross-defendant will be in a position to propound that proposition when it appears either unconditionally or conditionally. It would not affect jurisdiction. It would affect only the question of whether or not a stay would be given by reason of the exclusive jurisdiction clause. 9 Therefore, in those circumstances, I am prepared to make the orders for service out of the jurisdiction and I make the following orders: (1) The first defendant be granted leave to file and serve a cross-claim on General Export SRL, being a party outside Australia, in the form of Annexure A to the affidavit of Stuart James Clarke Windybank sworn 19 July 2007. (2) Service may be effected by lawyer or private agent in Italy, or in a manner not otherwise contrary to Italian law. (3) Service of the cross-claim is to be accompanied by service of the application, statement of claim and amended defence in English and in certified Italian translations. (4) Service of the documents is also to be accompanied by a copy of these orders in English and certified Italian translations, and a settled copy of these reasons. (5) The cross-claim be stood over for directions to 16 November 2007 at 4.15 pm. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 23 August 2007 Counsel for the Applicant: Mr C Wood Solicitor for the Applicant: McCabe Terrill Lawyers Date of Hearing: 17 August 2007 Date of Judgment: 17 August 2007