APC Marine Pty Ltd v T-D Joint Venture Pty Ltd [2009] FCA 713

FEDERAL COURT OF AUSTRALIA

APC Marine Pty Ltd v T-D Joint Venture Pty Ltd [2009] FCA 713

APC MARINE PTY LIMITED 119 763 012 v T-D JOINT VENTURE PTY LTD ACN 124 308 685 and TRIDENT AUSTRALASIA PTY LTD ACN 113 371 761

VID 465 of 2009

RARES J

26 JUNE 2009

SYDNEY (VIA VIDEO LINK TO MELBOURNE)

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY VID 465 of 2009

IN ADMIRALTY

BETWEEN: APC MARINE PTY LIMITED 119 763 012

Plaintiff

AND: T-D JOINT VENTURE PTY LTD ACN 124 308 685

First Defendant

TRIDENT AUSTRALASIA PTY LTD ACN 113 371 761

Second Defendant

JUDGE: RARES J

DATE OF ORDER: 26 JUNE 2009

WHERE MADE: SYDNEY (VIA VIDEO LINK TO MELBOURNE)

THE COURT ORDERS THAT:

1. The application to vacate the Orders made on 25 June 2009 is dismissed. 2. The application for a stay of the Orders made on 25 June 2009 is refused. 3. The costs of today be the plaintiff's costs in the proceedings. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY VID 465 of 2009

in admiralty

BETWEEN: APC MARINE PTY LIMITED 119 763 012

Plaintiff

AND: T-D JOINT VENTURE PTY LTD ACN 124 308 685

First Defendant

TRIDENT AUSTRALASIA PTY LTD ACN 113 371 761

Second Defendant

JUDGE: RARES J

DATE: 26 JUNE 2009

PLACE: SYDNEY (VIA VIDEO LINK TO MELBOURNE)

REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) 1 These proceedings came on very urgently, having been filed on Wednesday in the Victorian district registry of the court. Ryan J made an order transferring the proceedings to the New South Wales district registry where I have been dealing with them, initially, as the registry procedure judge in the admiralty and maritime arrangement of the court and also now as the docket judge. 2 The application is of an unusual kind. APC Marine Pty Limited, the plaintiff, owns a barge called the 'APC Aussie 1', which is used for laying marine pipes. T-D Joint Venture Pty Limited chartered the barge from the owners under a BIMCO Standard Bareboat Charter Party in the Barecon 2001 form. Ryan J determined an earlier dispute about the payment of hire, handing down his reasons for judgment yesterday: APC Marine Pty Limited v The Ship 'APC Aussie 1' [2009] FCA 690. Since that dispute arose, the purpose for which the barge had been brought to Australia from Singapore has been fulfilled. She was in the course of being towed to Singapore, pursuant to the obligation of the charterer, under cl 15 of the charter party, to redeliver the barge to Singapore. The tow ceased, apparently, in circumstances, on the material currently before me, when the towline broke and the barge had to be taken to Newcastle where she is currently lying. 3 There is a substantial dispute between the parties as to whether the barge was truly in class, notwithstanding that she had a certificate, issued by the American Bureau of Shipping as the classification society, saying that she met the requirements of her class. The certificate had been issued, as I understand the position at the moment, prior to the inception of the charter party. I have been informed that the flag state of the barge is Australia. The daily hire fee under the charter party is $75,000. The charterer says that in order for the barge to be given permission by the Australian Maritime Safety Authority to recommence the voyage, she needs to have fitted to her an emergency anchor that will cost in the order of $12 million or otherwise be fitted out with other safety equipment for a similar cost. Another possible means of causing the barge to be redelivered is a dry tow. That involves her being transported on top of another vessel. Apparently, this is also an exercise of considerable cost. 4 The owners sought what appears to be an unusual order in the application. That is now supplemented by a statement of claim filed earlier today. The order sought was that, pursuant to the charter party, the charterer and an associated company Trident Australasia Pty Limited, the second defendant, redeliver the barge to the owners at Singapore. There is another claim by the owners for unpaid hire, but that is not presently relevant. 5 Because of the apparent urgency of the matter, I convened a first directions hearing later on the day the matter was filed last Wednesday (24 June) and the matter was stood over for further directions to yesterday. 6 I asked at the first directions hearing what the defence to the claim was. That is, what the substantive reason for the apparent failure of the charterer to co-operate with requests that had been made in a previous week to its solicitors by the solicitors for the owners to sign an insurance survey certificate and instruct a tug master to take the vessel to Singapore. That request was contained in a letter from the owners' solicitors, dated 19 June 2009. On Monday this week, 22 June, the charterer's solicitors responded simply asserting, first, that they were seeking instructions as to why the insurance survey certificate and other requirements had not been signed and, secondly, they said that the previously arranged tow vessel had been demobilised due to the present inability of the parties to resolve the question of the requirements of the Australian Maritime Safety Authority. There is a letter in evidence from the Authority which is a little difficult to read, but it refers to a requirement for an emergency anchor. The letter also states that the Authority would consider any submissions if that were not practicable. It volunteered that manning by four persons capable of operating the anchoring and pump equipment would be adequate for the Authority's purposes. 7 In the affidavit in support of interlocutory relief, seeking a mandatory order that the barge be redelivered in Singapore, Francisco Martino, a director of the owner said that the charter period had ended on 10 June 2009, as a consequence of which the barge was required to be redelivered. Ryan J had granted an interlocutory injunction on 17 April 2009 while he considered his decision. That injunction precluded the owners from withdrawing the barge from service and his Honour did not act on the application for her to be arrested that the owners had made. Mr Martino said that the charterer owed the owners $1,050,000 in unpaid charter fees up to 10 June 2009 and that further fees would be incurred at the daily rate that I have indicated, until the barge was redelivered in Singapore. He said that she had to be redelivered in Singapore in order that, by 20 August 2009, the builder could complete any warranty inspection and works required to be undertaken. He said that it would take 30 to 35 days to tow the barge to Singapore from Newcastle. Mr Martino exhibited the current interim class certificate to his affidavit. That classed the vessel as an A1 barge, although that certificate was said to be valid until 6 July 2009 pending acceptance by the classification committee and the issue of the (actual) classification certificate. 8 Yesterday the charterer's solicitors responded in a letter to the owners' solicitors with an outline of their clients' contentions. They argued that the barge had been represented as being, in all respects, seaworthy, would comply with all class requirements and all requirements imposed by the flag State, being Australia. They argued that the barge should never have been classified in the interim class certificate as complying with the requirements of class by reason of the omission of the emergency anchor. They contended that that omission amounted to a misrepresentation either at common law by which the formation of the contract could be impugned or, alternatively, because it amounted to misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). 9 The determination of the question of whether there were representations made before the entry into the contact or by virtue of the presentation of a complying interim class certificate prior to the inception of the charter party may or may not fall to be considered with cl 3 of the Barecon 2001 form. But it is obvious that there is a serious issue between the parties as to the presence or absence of the emergency anchor and the circumstances in which, if it were required, the charterer entered into the charter party. 10 The principal of the charterer is its managing director, Peter Cox. He is also the principal of the Trident company. I was informed yesterday, and today an affidavit of Alison Ashford, a solicitor acting for the defendants, confirmed, that Mr Cox had travelled yesterday to Bangkok for medical treatment, being bone grafts to his jaw. Ms Ashford deposed that Mr Cox informed her that this treatment would take five to six separate operations over the space of about six days and that, as a result of this, her means of communicating with him would be predominantly via email until he returned to Perth. She noted that there would be occasions when Mr Cox would be under surgery or recovering from its effects and she would not be able to get instructions from him at all. She said that he would not be returning to Perth until 4 July 2009 and that she needed to obtain instructions from him in relation to a range of items, including compliance with directions I made yesterday to prepare the application for a mandatory injunction or specific performance for trial to commence on 7 July 2009. 11 I made those directions at the time, after discussion with the parties but I reserved the right of the defendants to make an application to vary the orders on the basis that they had had difficulties getting instructions yesterday from Mr Cox. Ms Ashford said that she would need instructions from Mr Cox, among other things, in order to be able to prepare a defence and cross-claim and to obtain instructions concerning the role of the Authority and the American Bureau of Shipping, in relation to the dispute, the preparation of evidence from third parties, such as the Authority and the Bureau, and the operators of the original towing vessel, together with evidence of previous attempts to resolve the matters in dispute between the parties. She would also need to obtain instructions from Mr Cox as to whether cross‑claims should be made against the Authority or the Bureau in relation to the classification of the barge. Ms Ashford said that Mr Cox would be required to give evidence on a range of issues, including the factual matrix in which the charter party was made, attempts to get the owners' cooperation and consent to having the barge delivered via a dry tow in Singapore, evidence of discussions and correspondence Mr Cox had had with the Authority's representatives and evidence of the practical aspects of complying with any mandatory order, together with material dealing with cross-claims which it is envisaged, so she suggests, will be brought in respect of latent defects in the barge. 12 In addition senior counsel for the charterers informed me today that a notice of termination under the charter party had been given. He sought to have the orders made yesterday for the preparation of the matter for hearing and the hearing itself vacated or, alternatively, stayed until the week commencing 6 July 2007, when Mr Cox would return to Australia and he could get instructions. 13 It is clear that an urgent hearing, of the kind which I proposed by the timetable I ordered yesterday, could not deal with issues of damages, either suffered by the owners or the charterer. It is necessary, if there is to be a prompt determination of the claimed entitlement to a mandatory order for the redelivery of the barge or specific performance of the obligation to redeliver her to Singapore, that the issues be limited simply to that entitlement. 14 The owners argued that Ms Ashford's affidavit had a number of deficiencies in explanation of Mr Cox's position. They asserted that he had decided to pursue elective surgery overseas, but that Ms Ashford had not explained or elaborated how she had communicated with Mr Cox to get the instructions that she recounted in the affidavit. It is safe to infer that those instructions were given orally. But, more importantly, senior counsel for the owners argued that her affidavit was dealing with the situation after the orders that I had made for a speedy trial. The affidavit does not indicate when Mr Cox gave the instructions, when his operations or surgery would begin and, significantly, it does not give an explanation as to whether or not it would have been possible to postpone that surgery, however personally inconvenient it would be. Senior counsel for the owners argued that that suggested that Mr Cox had chosen to pursue elective surgery, there being no indication in the affidavit that it was critical or necessary to his health at the present time, rather than to deal with the urgency of the matter before the Court. 15 In response, the charterers argued that they would be unfairly brought to a prompt trial without the material assistance that Mr Cox's attendance would be able to afford them. They argued that there was no particular urgency since the barge could not leave Newcastle until the Authority's requirements were satisfied and that, on their instructions, that it would take at least three months for a bower anchor to be fitted or for a dry tow to take place. They argued that the owners would continue to charge hire under the charter party, albeit that if it is terminated, there may be other issues as to damages, if the termination were valid. The charterers also say that had Mr Cox known that the vessel was not truly in class, that is, that the certificate was in error, he would not have caused the charterer to enter into the charter party. There was also a reference in the charterer's submissions to cl 30 of the charter party which provides for arbitration of disputes. However, there is no evidence of, and I have not been informed that there has been, any notice of a reference of the dispute to arbitration. 16 The circumstances of this proceeding suggest that it is a difficult exercise to balance the competing claims of each of the parties to the Court's ability to deal with their dispute in a way that will best suit each of them. The owners stand to lose a very large sum of money the longer there is a delay in the enforcement of any order that they might be entitled to, however apparently unusual the order is. In addition, there is the possible prejudice of not being able to return the vessel to the builder's boatyard in Singapore, to remedy any defects within the warranty period. On the other hand, there is the hampering of the defendants in being able to prepare the matter for hearing given Mr Cox's position. 17 On the material before me, I am not satisfied that Mr Cox requires to be in Bangkok for treatment and there is no indication in the affidavit that he is unable to make other arrangements so as to be able to attend to the prosecution of the proceedings. The inference that I draw from Ms Ashford's affidavit is that Mr Cox will, of his own volition, undertake the bone grafts. The affidavit is silent as to whether that process has been commenced or whether it could be postponed and it is also silent as to the necessity of that happening, at this time, rather than the competing demand of his dealing with the resolution of the commercial dispute that appears to have a bona fide urgency. 18 There is no evidence from the defendants of their ability to meet any charges for hire that will be incurred if there is a protracted delay of the kind they propose while Mr Cox's return is awaited. Nor does Ms Ashford's affidavit say that it will be impossible to communicate adequately with Mr Cox for the limited purpose of getting instructions and preparing the matter for the limited trial of the issue (which seems to me to have the critical and commercial urgency of the moment) whether or not there is some enforceable obligation that the charterer return the barge to Singapore as part of the redelivery. And if there has been a notice of termination issued, as I accept from counsel for present purposes is the case, there will also be the important issue of whether that termination was valid. 19 I think that justice can best be done to the parties by retaining the orders that I made yesterday for the matter to be prepared for a hearing. There is obviously a need to monitor whether or not, as matters progress, that can happen, particularly depending on what Mr Cox's position is. But at the moment I am not satisfied that he has a necessity to be where he is, such as would justify the owners being shut out of their right to have an urgent determination of their claim. The question as to whether or not there was a misrepresentation or breach of the charter party by delivering the barge with a certificate that said it was in class, when, in truth, it was not, appears to me to be one that is factually simple and readily resolvable. Likewise, it seems to me there will be a narrow but focussed factual dispute as to whether it is practicable to make an order of the kind sought for redelivery. Again, the legal issues seem to be fairly narrow and focussed on that point. 20 On the other hand, I do not think it would be appropriate to force either of the parties in an expedited fashion to a hearing of the whole of the dispute. It will be necessary to make an order under O 29 r 2 for a separate issue as to whether the owners made any misrepresentations entitling the charterers, first, to refuse to perform or terminate the charter party or, secondly, to relief under s 87 of the Trade Practices Act, to be heard and determined prior to any other issue in the proceedings. I am of opinion that the best course is, at present, to leave the orders that I have made in place but to make an order, or indicate to the parties so that they can formulate one that is properly protective of their rights, to throw up the separate issue that I have identified as being the one that is capable of speedy trial, and to monitor the position to see whether or not, in the course of next week, some substantive prejudice, that cannot be overcome, will be occasioned if the matter is to proceed to trial as fixed at present on 7 July 2009. 21 I appreciate that this application has been brought on urgently and that in that context it is not always possible to get all of the evidence in the best possible form. The deficiencies which have been pointed out and on which I have currently relied in Ms Ashford's affidavit may be ones that it is shown later to have been unfortunate but can otherwise be addressed. I am not seeking to invite that but I do not wish to do some irreparable injustice by holding the parties to the orders that I have made. On the other hand, I am not satisfied that Mr Cox was asked specifically to address whether he was willing to be ready, and I am not satisfied that he was willing to be ready, to allow this matter to proceed to trial. There is a lot of money at stake and a fairly narrow issue. 22 As senior counsel for the defendants has pointed out, Mr Cox was not on notice to there having been a proposal for a hearing on 7 July 2009 at the time he left for overseas. I think I mentioned on Wednesday that it might be possible to hear the issue in the next week, that is an earlier time (than 7 July) but then the discussion turned to getting the matter prepared on pleadings during the course of yesterday's directions hearing. I did not intend to be unfair or critical of Mr Cox, having regard to the fact that he was en route to Thailand when the hearing occurred yesterday, in saying that I have noted the omissions or deficiencies in Ms Ashford's affidavit on which I have relied in the exercise of my discretion. At the moment, I am not satisfied that I should vacate the orders and I reject the application. 23 I will order that the plaintiff's costs of today's application be its costs in the proceedings, to the intent that if the plaintiff ultimately fails in the proceedings it will not recover costs for today's hearing. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.