High Court of Australia Stephen J. McTiernan A.C.J. Menzies, Gibbs and Mason JJ. Aichhorn & Co KG v The Ship MV Talabot ORDER Appeal dismissed with costs. Cur. adv. vult. Stephen J. By this application the defendant seeks to have set aside service of notice of the plaintiffs' writ of summons upon a number of grounds which, in argument, come down to the objection that because the action took the form of a writ in rem service of notice of the writ on the defendant ship in Singapore, out of the territorial jurisdiction of this Court, was a nullity. It was said that it is essential to proceedings in rem that service be effected within the jurisdiction, such proceedings being of their nature wholly inconsistent with the absence of the ship from the Court's territorial jurisdiction. Under the Rules of Court in force prior to 1952 no question of service of a writ in rem out of the jurisdiction could have arisen since the rules then provided, by O. 42 A, r. 14, that in Admiralty actions in rem the writ of summons should be served by the Marshal of the Court or his officer. In this respect they followed the English practice as it formerly existed under the rules of 1875 (O. 9, rr. 9 & 10), and see O. 42 A, r. 1. However the present Rules of this Court, adopted in 1952, omit the former O. 42 A, which dealt exclusively with Admiralty actions; many of its provisions are retained but are now to be found dispersed throughout the rules; the equivalent of old r. 14 of O. 42 A now appears as O. 9, r. 10, but is concerned, as its English equivalent has long been, only with service of warrants of arrest, there now being no requirement that the writ of summons be served by the Marshal. Service out of the jurisdiction is regulated by O.10 of the rules; it makes no special mention of Admiralty actions generally or of actions in rem in particular. It appears that in Admiralty actions instituted in the High Court of Judicature there can be no service of process out of the jurisdiction; notes to O. 11, r. 1 of the 1973 Annual Practice so state, as does British Shipping Laws, vol. 1 (Admiralty Practice — McGuffie) (1964), pars 61 and 171, Atkin's Court Forms (2nd ed.), vol. 3, p. 29, and Halsbury's Laws of England (4th ed.) vol. 1, par. 363. In "The Espanoleto" [1] , Hill J. emphatically expressed the like view when he said: "Of course, a writ in rem cannot be served till the res comes within the jurisdiction, but I can see no reason why the writ cannot be issued and then served when the res comes within the jurisdiction." The relevant procedural rules applicable to the case of "The Espanoleto" [2] do not appear to have differed materially from the present Rules of this Court. It is also implicit in the decision in "The Prins Bernhard" [3] , that service may only be effected within the jurisdiction — see especially [4] . 1. [1920] P. 223, at p. 225. 2. [1920] P. 223. 3. [1963] 2 Lloyd's Rep. 236. 4. [1963] 2 Lloyd's Rep., at pp. 239, 248. Examination of the foregoing references and of the materials upon which they are founded does not disclose with certainty the basis for this limitation, whether it lay in the old Admiralty procedure whereby the initiating process was a warrant of arrest which itself contained the citation — Rules of the High Court of Admiralty 1859 , Nos. 16 & 17 — so that arrest of the ship was a necessary first step unless some voluntary submission to jurisdiction was effected, or whether it was based upon some more fundamental consideration. The modern English references may be justified by the terms of O. 75, r. 4 (3), of the English Rules, a provision that is not reflected in the Rules of this Court. So far as I am aware no Australian cases throw any light upon the question. The practice of the Colonial Vice Admiralty Courts in North America was, it seems, always to require the presence of the res within the court's jurisdiction before issue of writ, let alone before service was effected and by statute this requirement still exists in Canada — Wisewall, Development of Admiralty Jurisdiction and Practice (1970), p. 193 — as it does in the United States — American Jurisprudence 2d., vol. 2, par. 96. The North American requirement is therefore stricter than that postulated in the latter portion of the passage which I have cited from the judgment of Hill J. As Mr. Wisewall points out, at pp. 187-188 of his work, arrest of a ship has, in England at all events, become relatively uncommon — McGuffie, op. cit., pars. 232 & 243; instead undertakings are given to appear and give bail for the claim — see High Court Rules, O. 9, r. 9. However, no such undertaking has been given here and the question is whether the service which has been effected is good service so as to found jurisdiction. There are, I think, good reasons why the works of authority take the view that the res must, at latest at date of service, be physically within the jurisdiction, at least if recourse has not been had by its owners to an undertaking and bail or to procedure by way of caveat such as O. 30 of the Rules of this Court contemplates. Both under what has been styled the procedural theory of actions in rem, founded on the views of Jeune J. in "The Dictator" [5] — and see "The Dupleix" [6] and "The Joannis Vatis" [No. 2] [7] , and the rival personification theory exemplified in "The Longford" [8] ; "The Burns" [9] , and in U.S. cases reviewed in Harvard Law Review, vol. 77, p. 1122, the basis of the action in rem has been the presence of the res within the jurisdiction. This has been modified in the U.K., as instanced by "The Espanoleto" [10] , to the quite limited extent of permitting issue of proceedings without presence of the res, service however having to be effected once the vessel enters the jurisdiction; it has also in effect been modified where, by a variety of arrangements — McGuffie op. cit., pars. 231-245 — a shipowner submits to jurisdiction to avoid arrest of his ship, the bail representing the ship itself, the taking of bail releasing the ship — "The Kalamazoo" , per Dr. Lushington [11] . But it is threat of arrest that gives rise to such arrangements and it remains true that "the basic principle of the action in rem is that a res may be arrested " McGuffie, op. cit., par. 231. Only if it be within the jurisdiction can there be an arrest and the ability to arrest is, I think, inherent in the action in rem. 1. [1892] P. 64. 2. [1912] P. 8. 3. [1922] P. 213. 4. (1889) 14 P.D. 34. 5. [1907] P. 137. 6. [1920] P. 223. 7. (1851) 15 Jur. 885, at p. 886. I conclude that it would run counter both to the general practice of Admiralty courts and to the basic concept of Admiralty actions in rem to permit service of process in rem out of the jurisdiction. The order made by me ex parte on 10th August 1973, will be discharged and the service of notice of writ effected in Singapore will be set aside. The plaintiff will pay the taxed costs of this application. From that decision the plaintiffs appealed to the Full Court of the High Court. Cur. adv. vult. The following written judgments were delivered: — Oct. 22 McTiernan A.C.J. This is an appeal from an order of Stephen J. The order was made on an application to set aside an ex parte order giving leave to serve outside the Commonwealth notice of the writ of summons in an Admiralty action in rem which was commenced in the High Court of Australia. According to the words of the writ it is an action "between" the plaintiffs (appellants) "and" the Ship M.V. "Talabot". The latter is called "defendant". The Citation in the writ is addressed: To The owners and all others interested in the Ship M.V. "Talabot", c</emphasis>/- Wilh Wilhelmsen Agency Pty. Ltd., 7th Floor, 60 Market Street, Melbourne 3000. Order 2 of the High Court Rules deals with "Writs of Summons". This order provides as follows: 3. The writ of summons for the commencement of an action shall, except where a different form is required by these Rules, be in one of the forms numbered 1 and 2 in the First Schedule, with such variations as the circumstances require. 4. A writ of summons or other originating process for service out of the Commonwealth, or of which notice is to be given out of the Commonwealth, shall not be issued without the leave of the Court or a Justice. 5. (1) A writ of summons to be served out of the Commonwealth, or of which notice is to be given out of the Commonwealth, shall be in one of the forms numbered 3 and 4 in the First Schedule, with such variations as the circumstances require. (2) The notice shall be in the form numbered 5 in the First Schedule, with such variations as the circumstances require. 6. The writ of summons in an Admiralty action in rem shall be in the form numbered 10 in the First Schedule, with such variations as the circumstances require. According to form 10, the proper title of the action, it purporting to be "In Admiralty (in rem)", is the plaintiff "against" the ship. In form 10, the ship is not described as "defendant". The variation of the writ of summons, by which the action was commenced, from form 10, does not result in the action being anything other than an action against The Ship M.V. "Talabot" — an Admiralty action in rem. Order 10 of the High Court Rules provides that in certain cases leave to serve a writ of summons or notice of a writ of summons outside the Commonwealth may be given by the Court or a Justice. In such cases writs of summons would be in form 3 and notices of writs of summons in form 4. Order 10, r. 1 begins: "Leave to serve a writ of summons, or notice of a writ of summons, outside the Commonwealth " This seems to me to refer back to O. 2, r. 5, not to O. 2, r. 6. It is clear, I think, that none of the forms, 1, 2, 3 or 4 apply as adjuncts to O. 2, r. 6. In my opinion the High Court Rules do not evince the intention to give to the Court or a Justice power to grant leave to serve a writ of summons commencing an Admiralty action in rem, or notice of such an action, outside the Commonwealth. In my opinion it argues against the Rules intending the Court or Justice to have such a power that the Rules do not provide, in the case of an Admiralty action in rem, the form of writ or of the notice to be given of it to be served outside the Commonwealth. In my opinion the order of Stephen J., the subject of this appeal, is right. Menzies, Gibbs and Mason JJ. This is an appeal from an order of Stephen J. discharging an earlier order, made ex parte, which gave leave to serve out of the jurisdiction the writ of summons in an action brought by the appellants in the Admiralty jurisdiction of this Court, and setting aside the service of notice of the writ of summons effected in Singapore under the earlier order. The Court has already indicated that the appeal will be dismissed. It remains to give our reasons. The action was brought by the appellants as plaintiffs against the ship M.V. "Talabot" as defendant. The citation on the writ was addressed to "the owners and all others interested in the ship M.V. "Talabot" ". According to the statement of claim the action is within the Admiralty jurisdiction of the Court "as an action by the owner or consignee of goods or assignee or holder for value of a bill of lading of goods to be carried by sea in a ship from a port in the Commonwealth to another port (Hamburg in Germany) for damage done to those goods or part thereof and for loss of part thereof by the negligence or misconduct and breach of duty and breach of contract on the part of the ship its owner or charterer etc.". It may be assumed for the purposes of this appeal that this Court would have jurisdiction in Admiralty to entertain the action if service of the writ were properly effected. The ship has not since the writ was issued been within the territorial waters of the Commonwealth and the appellants purported to effect service upon her whilst she was berthed at Singapore. The question that falls for decision is whether in an action brought in this Court against a ship — i.e. in an Admiralty action in rem — service of the writ can validly be effected out of the jurisdiction. In Northcote v. Owners of the "Henrich Björn" [17] , Lord Watson described an action in rem as follows: The action is in rem, that being, as I understand the term, a proceeding directed against a ship or other chattel in which the plaintiff seeks either to have the res adjudged to him in property or possession, or to have it sold, under the authority of the Court, and the proceeds, or part thereof, adjudged to him in satisfaction of his pecuniary claims. The essential nature of an Admiralty action in rem is concisely stated by the learned authors of Dicey and Morris: Conflict of Laws, 8th ed. (1967), at p. 214 : Its primary object is to satisfy the plaintiff's claim out of the res. For the essence of the procedure in rem is that the res may be arrested and sold by the court to meet the plaintiff's claim, provided it is proved to the satisfaction of the court. Of course, in many cases the ship will not be either arrested or sold, but it is apparent, from the very nature of the proceedings, that for a court to have jurisdiction to entertain an action of this kind it is necessary that "the subject matter was so situated as to be within the lawful control of the State under the authority of which the Court sits": Castrique v. Imrie [18] . 1. (1886) 11 App. Cas. 270, at pp. 276-277. 2. (1870) L.R. 4 H.L. 414, at pp. 428-429, 448. Since the jurisdiction of the court to entertain an action in rem is based on the presence of the res within the territory of the state under whose authority the court sits, and since the purpose of such an action is to enable the judgment to be satisfied out of the res, it must follow, at least as a general rule, that a writ in an action in rem can only be served if the res is within the jurisdiction. If it were intended, by the High Court Rules, to make a radical departure from former practice, and to permit service of such a writ out of the jurisdiction, it would be expected that this intention would be revealed by clear language. However, the rules, so far from containing any indication that a writ in an action in rem can be served out of the jurisdiction, suggest the contrary. Order 9, r. 11 provides as follows: In an Admiralty action in rem, service of a writ of summons or warrant against a ship, freight or cargo on board shall be effected by nailing or affixing the original writ or warrant for a short time on the mainmast, or on the single mast, of the vessel or on some other conspicuous part of the vessel, and, on taking off the process, leaving a true copy of it nailed or fixed in its place. The mode of service provided by this rule is one that "has been firmly established by many years of usage", and is designed to inform all interested parties that an action in rem is laid against the ship: The Prins Bernhard [19] . The nature of the service contemplated by this rule strongly supports the view that it is to be effected within the jurisdiction. Moreover, it will not be uncommon for the writ to be accompanied or followed by a warrant of arrest (and indeed this would be usual if the solicitor of the defendant did not agree to put in bail, or to pay money into court in lieu of bail, under O. 9, r. 9) and in such a case the warrant must be served by the marshal or his deputy (O. 9, r. 10) — in other words, the warrant must be served within the jurisdiction, which can only be done if the ship itself is within the jurisdiction. 1. [1964] P. 117, at p. 131. It is true that the Rules no longer require, as O. 42 A, r. 14 of the repealed Rules formerly required, that in an Admiralty action in rem the writ of summons shall be served by the marshal or his officer, but this provides no indication that the writ may be served outside the jurisdiction; it may simply be unnecessary, in some cases, to invoke the aid of the marshal or his deputy to effect service. On behalf of the appellant it was submitted that O. 10, r. 5 would enable service in an action in rem to be effected by nailing or affixing a notice of writ, rather than the original writ, to the mast of the ship. Order 10, r. 5 provides that "Where the defendant is not within the Commonwealth, service of notice of a writ is deemed to be effective service of the writ". That rule, however, does not provide that the affixing of a notice of a writ to the mast of a ship shall be deemed to be an affixing of the original writ, and its general provisions do not detract from the force of the special provisions of O. 9, r. 11. It was further submitted that the general provisions of O. 10, relating to service outside the Commonwealth, apply to actions in rem. It was said, truly enough, that an action in rem is not simply an action against property — the owner of the property is indirectly impleaded in the action — and that once an appearance is entered the action proceeds as an action in personam, and that many of the provisions of the Rules, although generally expressed, apply to Admiralty actions. Therefore, it was said, the provisions of O. 10 apply equally to actions in rem and since, in the present case, the action was brought to recover damages in respect of a breach of contract made within the Commonwealth leave could properly be given under O. 10, r. 1 (1) (e) to serve the writ outside the Commonwealth. There is not the slightest indication that the general words of O. 10 are intended to obliterate the clear distinction between Admiralty actions that are in rem and those that are in personam, and the provisions of that Order cannot be interpreted as effecting a silent but revolutionary change in procedure. Their operation does not extend to Admiralty actions in rem. In short O. 9, r. 11, in conformity with the long-standing and well-established principle that Admiralty jurisdiction in rem may be exercised only when the res is within the jurisdiction, provides for service upon a ship within the jurisdiction and the provisions of O. 10 have no application to service upon a ship. The reasons given and the conclusion reached by Stephen J. were correct. The appeal will be dismissed with costs.