Acquired Insights Pty Ltd v Ship 'Bobsled', The [2006] QSC 400

[2006] QSC 400 SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION ROBIN A/J No 8513 of 2006 ACQUIRED INSIGHTS PTY LTD (ACN 100 510 147) Plaintiff and THE SHIP "BOBSLED" Defendant BRISBANE ..DATE 31/10/2006 ORDER CATCHWORDS: (Cth) Admiralty Act 1988 s 17 - Admiralty Rules 1988 r 15 - (Cth) Shipping Registration Act 1981 - defendant ship arrested in proceeding in rem for cost of refit, etc - three companies named in writ as a "relevant person" on basis of ownership recorded in the Australian Shipping Register, two of which later turned out to be deregistered - application by plaintiff to hold ASIC as a "relevant person", being entitled to their assets under the Corporations Act - no sufficient reason to refuse or adjourn the application shown by the third company, whose defence pleaded it was sole owner 1 -- 1 of 6 -- 2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: There is before the Court an application by the plaintiff for leave to amend its writ in Form 6 under the Admiralty Rules 1988 by substituting the Australian Securities & Investments Commission as a "relevant person" in lieu of Rothday Pty Ltd v. Salematch Pty Ltd. ASIC would thus be nominated as a relevant person along with Benwerran Pastoral Company Pty Ltd. The claim, embodied in the writ and attached statement of claim in Form 8, is for the cost of a refit, repairs and storage incurred by the defendant ship and interest. An order for sale is sought. Section 3 of the (Cth) Admiralty Act 1988 defines relevant persons as those who would be liable on the claim in a proceeding commenced as an action in personam. ... HIS HONOUR: Section 4 characterises the claim as a general maritime claim; section 17 confers a right to proceed in rem on owners' liabilities. By r 15, the Rules require the initiating process require relevant persons (here representing the owners of the ship) to be identified to afford them the possibility of coming in to defend a claim. Obviously a ship left to its own devices is in no position to mount a defence. Those identified as a relevant person are not really parties so much as persons identified and acknowledged to have an entitlement to come in to look after their interests and/or those of the ship. The "Bobsled" has been arrested by the -- 2 of 6 -- 3 ORDER 1 10 20 30 40 50 60 marshall at the plaintiff's premises and apparently remains there. At the stage when those steps happened the plaintiff and its solicitors were led by searches of the Australian Shipping Register to think that the 64 shares in the ship were held as to one-third each, or as nearly as may be, by the three companies. To that point things happened ex parte. Following that point service on relevant persons occurred. It has turned out that before anything relevant to the claim happened the two companies first identified above were deregistered. ASIC takes over their assets pursuant to section 601AD of the Corporations Act 2001. Although it is accepted that trusts and the like can modify the legal ownership of ships as recorded in the Register, the registered title must be regarded as significant until the contrary is shown. Benwerran Pastoral Company has taken up its entitlement to participate by filing a defence and counterclaim in which the company and the ship are identified as defendants. By putting in a defence the company has rendered itself liable on any judgment the plaintiff may obtain: Admiralty Act s 31. Peter Saggers is added as a defendant by counterclaim. The counterclaim complains of deficient work on the ship, over-payment and the like, and asserts a balance owing to the defendants. -- 3 of 6 -- 4 ORDER 1 10 20 30 40 50 60 Mr Murphy, representing them, has appeared today because he has been served with the application. He urges the Court to adjourn it for two weeks. He has been served only yesterday evening and has a lack of instructions. He is concerned that it may be the wrong course to "join" ASIC, that doing so may prove to be a step that has to be undone. He is unable to assert any prejudice to his clients other than that the costs may be increased by the bringing in of ASIC and with the consequence that his clients have to bear some unnecessary costs. By making that point in court today he, it seems to me, has effectively protected his clients' position and placed Mr Wellner on notice. It would serve only to increase costs to adjourn today's application. I can see no reason for not proceeding with it. Reference has been made to the Shipping Registration Act 1981, in particular sections 36 and 45 which mandate the use of a bill of sale to transfer a legal interest in a ship. Such instruments must be lodged to be registered within 14 days (s 37). Section 45 acknowledges the right of the registered owner to transfer a ship or a share. Mr Wellner informed the court that penalties may be visited upon the transferees and indeed also the ship's agent if there is not timely compliance with obligations of that kind. The defence asserts that the ship is owned by Benwerran Pastoral Company alone. It may be that in equity that contention is or will be borne out, but for all that appears, so far as legal title is concerned, it is an assertion that has not been established. -- 4 of 6 -- 5 ORDER 1 10 20 30 40 50 60 As ordinarily happens when it is sought to involve deregistered companies in litigation ASIC has made its attitude known in a letter, one of 18th of October 2006 exhibited to Mr Wellner's affidavit. The letter indicates that ASIC does not intend to exercise any of the rights or powers it may have under section 601AE of the Corporations Act to dispose of the ship. ASIC's view is that it clearly is a relevant person and that it presents no objection to being named as such in the writ. It denies any knowledge of any transactions that the deregistered companies may have engaged in in relation to the ship. It indicates it does not oppose the order sought by the plaintiff for disposal of it "on the basis that no costs are awarded against ASIC and any surplus sale proceeds are payable to ASIC in accordance with section 601AD(2)". ASIC recorded its intention not to attend today in the letter. The indication that ASIC may be amenable to inheriting some pecuniary advantage is no doubt of concern to Mr Murphy. One would assume, particularly against a background of information the court has from the Bar table to the effect that the "Bobsled" is a very well known racing yacht, that at some point in the future Mr Murphy's corporate client will establish its full ownership. That stage has not been reached. Today there ought to be an order in terms of the plaintiff's application----- -- 5 of 6 -- 6 ORDER 1 10 20 30 40 50 60 ... HIS HONOUR: The order will provide that the ship pay the costs. ----- -- 6 of 6 --