FEDERAL COURT OF AUSTRALIA Tritton Resources Pty Limited v Ever Rock Navigation S.A. [2017] FCA 1605 File number: NSD 1190 of 2017 Judge: RARES J Date of judgment: 17 November 2017 Date of order: 21 November 2017 Legislation: Carriage of Goods by Sea Act 1991 (Cth) Sch 1A Evidence Act 1995 (Cth) s 131 Federal Court Rules 2011 rr 10.42, 10.43 Cases cited: Ho v Akai Pty Limited (in liq) (2016) 247 FCR 205 Date of hearing: 17 November 2017 Registry: New South Wales Division: General Division National Practice Area: Admiralty and Maritime Category: No Catchwords Number of paragraphs: 16 Counsel for the Plaintiffs: Mr E Cox Solicitor for the Plaintiffs: Hicksons Lawyers ORDERS NSD 1190 of 2017 BETWEEN: TRITTON RESOURCES PTY LIMITED First Plaintiff STERLITE INDUSTRIES (INDIA) LIMITED Second Plaintiff FREEPOINT METALS & CONCENTRATES LLC Third Plaintiff AND: EVER ROCK NAVIGATION S.A. Defendant JUDGE: RARES J DATE OF ORDER: 21 NOVEMBER 2017 THE COURT ORDERS THAT: 1. The Plaintiffs have leave, pursuant to rules 10.42 and 10.43 of the Federal Court Rules 2011, to serve legalised (by apostille) copies of the Originating Application, the Statement of Claim, the Plaintiffs' Genuine Steps Statement and this Order (together, "Court Documents"), together with copies of the Court Documents translated into Spanish, on the Defendant in the Republic of Panama by hand delivery to the following address: MMG Tower 23rd Floor, Avenida Paseo del Mar, Costa del Este, Panama City, Republic of Panama. 2. The costs of the Plaintiffs' Interlocutory Application filed on 13 July 2017 and in relation to service of the Court Documents are reserved. 3. The Plaintiffs inform the Associate to Rares J after service has been effected upon the Defendant so that the Court may arrange for an appropriate case management listing soon thereafter. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) RARES J: 1 Tritton Resources Pty Ltd, an Australian company, is the first plaintiff. Tritton was named as the shipper on a clean on board bill of lading issued on behalf of the master of Ikan Jahan at Newcastle in New South Wales on 11 November 2011 in respect of a cargo of copper concentrates of over 11,000 metric tonnes. The bill of lading was claused freight payable as per charter party and the bill was in the Congenbill edition, 1994. The other two plaintiffs claim in the alternative to have been the person or persons who owned the cargo when Ikan Jahan grounded on Manuk Island in the Banda Sea off Indonesia on 18 December 2011 while on her voyage to deliver the cargo at Tuticorin, India. Ever Rock Navigation S.A., the defendant, is incorporated under the laws of the Republic of Panama and was the owner of the vessel at the time of the grounding. The plaintiffs apply for leave to serve the originating application and statement of claim on Ever Rock in Panama. Background 2 The basis of the cause of action included in the statement of claim is that Ever Rock failed to carry the cargo to its destination in accordance with its obligations under the amended Hague-Visby Rules forming part of Sch 1A of the Carriage of Goods by Sea Act 1991 (Cth) (the Rules) which applies to bills of lading for cargo carried from ports in Australia. The plaintiffs allege that as a result of the grounding, Ever Rock entered into a salvage agreement with Fukada Salvage and Marine Works Co. Ltd, a Japanese corporation, on the Japan Shipping Exchange salvage agreement form 2007 for, among other things, the salvage of the cargo, and, when the ship and cargo were salved, Fukada and the plaintiffs entered into a settlement agreement for payment of the salvage reward in an amount of USD2,718,675.24. In the course of reaching the settlement agreement, the plaintiffs incurred legal costs in London of GBP33,891.34 for which they also claim. Subsequently, on 30 November 2015, a general average adjustment occurred under which the plaintiffs became liable to pay Ever Rock and the adjusters the sum of USD719,817.88 for general average adjustments in respect of the cargo. 3 The plaintiffs claim that, under Art 3(1) of the Rules, Ever Rock was under a non-delegable duty, before and at the beginning of the voyage from Newcastle, to exercise due diligence to make Ikan Jahan seaworthy. They allege that in breach of the contract of carriage evidenced in the bill of lading and in breach of the duty to exercise due diligence to make the vessel seaworthy, the vessel grounded by reason that, in substance, in preparing the passage plan for the voyage the master and first, second and third officers used maps or charts that were too small, or alternatively, failed to notice on the map or chart that they used, the presence of Manuk Island that was directly in the path of, or in close vicinity to, the vessel's proposed passage through the Banda Sea. 4 Expert reports of James Cochrane attached to the affidavit of the plaintiffs' solicitor, Tannie Kwong, of 14 November 2017, explain the basis on which they claim that there is a prima facie case for the purposes of r 10.43(4)(c) of the Federal Court Rules 2011 for some of the relief, at least, including the claims for indemnity and damages against Ever Rock in respect of the circumstances in which the grounding occurred. 5 Counsel for the plaintiffs has drawn my attention to the possibility that the passage plan which Mr Kwong furnished to Mr Cochrane for the purposes of his preparation of his expert reports may have been provided in the course of without prejudice negotiations between the parties and their insurers or P&I Clubs, and therefore may not have been available for use in the litigation by reason of the without prejudice privilege at common law or pursuant to s 131 of the Evidence Act 1995 (Cth). 6 However, Mr Cochrane also drew the plaintiffs' solicitors' attention to a report on the grounding published by the Panama Maritime Authority. That report is publicly available on the Global Integrated Shipping Information System website of the International Maritime Organisation or IMO. That report included the following statements in paragraph 10.5.5: The passage plan was signed by all officers. All large scale charts required for the voyage were not used and [the vessel] was using a small-scale chart 942B for the navigational area. The course was adjusted directly to P. Manuk Island. The mentioned small scale chart was in use at the time of the accident and it was used on December 16th, 2011 at 22:00 hrs (exactly 31 hours BEFORE the incident date). However, no one in the bridge team paid attention that the course traced has been laid over the island. The large scale charts available on board for the area were clearly marked on the chart but no one paid attention to this. 7 In addition, the report stated that: the ship's officers were not aware of the archipelagic sea lanes and the symbols used for those lanes on the charts; there was an absence of much information passing between the bridge team to review the passage plan and the charts used; and the vessel's master said that when he reviewed the passage plan, prior to departing Townsville, on 25 November 2011, he had advised the second officer to change the course route as it was heading towards the island. 8 The report identified areas from which the crew could learn from the incident, including the failures: properly to prepare a passage plan, reviewed by the master, that had resulted in the course being plotted directly over the island; of the master to write a night order on the night before the grounding that identified the hazards likely to be encountered; to use larger scale maps for navigation in the area of the casualty; of the bridge team to mark Manuk Island with a symbol, even after plotting its position on the same chart on 16 December 2011 at 2200 hours; by the bridge team to identify archipelagic sea lane information on the chart or to read or properly understand it; and to have a proper exchange of information between members of the bridge team, including the failure to advise the master of poor visibility and weather conditions at the time of the casualty. 9 Mr Cochrane also attached the IMO Resolution A.893(21) adopted on 25 November 1999 for Guidelines for Voyage Planning that required: that appropriate scale, accurate and up-to-date charts be used for the intended voyage or passage: … as well as any relevant permanent or temporary notices to mariners and existing radio navigational warnings (par 2.1.5) that the detailed voyage or passage plan should include, among other things: … the plotting of the intended route or track of the voyage or passage on appropriate scale charts: the true direction of the planned route or track should be indicated, as well as all areas of danger (par 3.2.1) 10 Mr Cochrane opined that a prudent ship owner would ensure that, first, passage planning for his ships was covered by a safety management system and standing orders and, secondly, a copy of the IMO Resolution was made available to his ships, together with other suitable, relevant publications. He opined that navigational dangers and risks were covered by current navigational charts and publications and a prudent ship owner would equip his vessel for the intended areas of trading with appropriate charts and nautical publications. Consideration 11 In Ho v Akai Pty Limited (in liq) (2016) 247 FCR 205 at 208 [10] Finn, Weinberg and Rares JJ said in relation to the analogue of r 10.43 in the Federal Court Rules 1979: As has been observed on many occasions, the prima facie case requirement has to be met at the outset, usually on an ex parte basis, and without the advantage of discovery and other procedural aids to the making out of a case: see eg Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390. It "should not call for a substantial inquiry": WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 476; see also Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 at 549. For present purposes it is sufficient to say that a prima facie case for relief is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110. Or, to put the matter more prosaically as Lee J did in Century Insurance Ltd (in prov liq) v New Zealand Guardian Trust Ltd [1996] FCA 376: What the Court must determine is whether the case made out on the material presented shows that a controversy exists between the parties that warrants the use of the Court's processes to resolve it and whether causing a proposed respondent to be involved in litigation in the Court in Australia is justified. 12 I am satisfied that on the evidence before me in accordance with that test, the plaintiffs have established a prima facie case for relief against Ever Rock sufficient to meet the requirements in r 10.43(4)(c). The proceeding appears to be based, for the purposes of the table in r 10.42, on a cause of action arising in Australia, being the negligent passage planning (item 1), a proceeding in relation to a contract that was made in, or governed by the law of, Australia, or breach of that contract, being the contract between Tritton and Ever Rock evidenced in the bill of lading (item 3(a), (c), (f)), as well as potentially a proceeding based on a contravention of an Act that was committed in Australia, being a breach of Art 3(1) of the Rules (item 12). 13 I have made the above findings on only the material before me. I am conscious that this material is likely to be incomplete and have relied on the passages of Mr Cochrane's evidence that did not appear to depend on the version of the passage plan that may be affected by the without prejudice privilege. Ever Rock may have substantial evidence and defences that are not raised expressly in the present limited evidence some of which is in a form that would not be admissible in a final hearing. 14 Mr Kwong deposed that Panama is not a party to any convention or treaty permitting or facilitating service of Australian Court process in its territory. He deposed to evidence on information and belief from Francisco Moncada, a Panamanian lawyer, that in order to serve process pursuant to the law of Panama, it is necessary to have a legalised or apostilled copy of the writ or claim filed in this Court, relevantly the originating application, together with the exhibits, relevantly, the statement of claim and the Court's order authorising service in Panama. Mr Moncada said that these Court documents can be served on the resident agent of Ever Rock, being Morgan & Morgan at MMG Tower, 23rd floor, Avenida Paseo del Mar, Costa del Este, Panama City, Republic of Panama. 15 Counsel for the plaintiffs said that Mr Kwong would prepare and file on 20 November 2017 an affidavit giving evidence on information and belief as to Mr Moncada's expertise to be able to opine that that is a method of service permitted by the law of Panama. (That occurred when Mr Kwong filed his affidavit of 20 November 2017.) 16 For these reasons, if the foreshadowed further affidavit establishes Mr Moncada's expertise, I will order that Ever Rock may be served in Panama in accordance with the proposed method of service. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 21 December 2017