Far North Queensland Ports Corporation v Owners of the Ship [2012] QSC 87

1 SUPREME COURT OF QUEENSLAND CITATION: Far North Queensland Ports Corporation v Owners of the Ship “Captain Senrab” [2012] QSC 87 PARTIES: FAR NORTH QUEENSLAND PORTS CORPORATION (Plaintiff) v OWNERS OF THE SHIP “CAPTAIN SENRAB” (Defendant) FILE NO/S: 428 of 2011 DIVISION: Trial PROCEEDING: Writ ORIGINATING COURT: Supreme Court, Cairns DELIVERED ON: 29 March 2012 (ex tempore) DELIVERED AT: Cairns HEARING DATE: 28 – 29 March 2012 JUDGE: Henry J ORDER: 1. There be judgment for the plaintiff against: a) the ship Captain Senrab, b) William Donald Nixon and Pamela May Nixon, c) Graeme Siegmund Roggensack, for the sum of $9,187.89 for claim, and for $521.71 for interest thereon, and for the plaintiff’s costs of and incidental to this action (including reserved costs) to be assessed on the standard basis. 2. The plaintiff be at liberty forthwith to cause the service of a warrant of arrest against the ship Captain Senrab. 3. There be liberty to any party to apply upon two days’ written notice to the other parties. CATCHWORDS: ADMIRALTY LAW – action under the Admiralty Act 1988 (Cth) – where ship not yet arrested – whether action in rem ADMIRALTY LAW – where buyer has paid purchase price but registration not transferred - whether equitable ownership has passed -- 1 of 17 -- 2-2 1 10 20 30 40 50 60 ADMIRALTY LAW – where statutory charge levied – where failure to pay – whether there was a quasi-contractual relationship – whether payment could be withheld where unhappy with services Admiralty Act 1988 (Cth) ss 3, 4(3), 31 Shipping Registration Act 1981 (Cth) Transport Infrastructure Act 1994 (Qld) ss 279, 280 Transport Infrastructure (Ports) Regulation 2005 (Qld) s 5, sch 2 Kent v The Vessel “Maria Luisa” (No 2) (2003) 130 FCR 12 Malaysia Shipyard and Engineering SDN BHD v The “Iron Shortland” (1995 59 FCR 535 Owners of The Ship “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 Rose v Watson (1864) 33 LJ Ch (NS) 385 Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 The Nautik [1895] P. 121 COUNSEL: Dr MA Jonsson for the Plaintiff GS Roggensack on behalf of himself WD Nixon on behalf of himself and PM Nixon SOLICITORS: MacDonnells Law for the Plaintiff GS Roggensack on behalf of himself WD Nixon on behalf of himself and PM Nixon -- 2 of 17 -- 3 JUDGMENT 1 10 20 30 40 50 60 HIS HONOUR: In this proceeding in the Court's Admiralty jurisdiction the plaintiff, by its amended writ, claims payment for port charges due and owing at the time of filing of the writ and for further port charges accruing between then and now and interest thereon. The cumulative total, including interest, is $9,709.60. Background The action is a general maritime claim pursuant to section 4(3)(p) and (w) of the Admiralty Act 1988 (Cth). It is an action in rem and thus one with which this Court may deal pursuant to section 10 of the Admiralty Act. The matter was first before me on the 2nd of November 2011, at which time I made certain orders and gave reasons. As was then explained, at the time of the issue of the writ there was also an application, pursuant to the Admiralty Rules 1988 (Cth) rule 39, for an arrest warrant against the ship Captain Senrab. The Registrar may issue an arrest warrant in such a situation pursuant to rule 40 and she exercised her discretion to do so, a decision which was not challenged. Doubtless because of the potential relative cost caused by executing the warrant and the authorities assuming custody of the vessel, in comparison with the amount here in dispute, the -- 3 of 17 -- 4 JUDGMENT 1 10 20 30 40 50 60 applicant proposed, on the 2nd of November 2011, that I order a stay of the warrant's execution pending further order and I did so. The applicant has not sought a further order on that aspect prior to the disposition of this trial. Predictably, it now seeks an order, as part of the decision I am now pronouncing, that it be at liberty to execute the warrant. The fact that the ship has not yet been arrested may, under some now superseded English rules of practice, have meant that the action was not yet proceeding in rem, but that is no longer the position. As was observed in The Nautik [1895] P. 121 at 124 by Bruce J: "It is quite true that, according to the older practice, a suit in rem was commonly commenced by warrant arresting the property, just as, in still earlier practice, a suit in personam was commonly commenced by a warrant arresting the person. But all that is necessary to found jurisdiction is to give formal notice to the persons interested that a claim is made against them or against their property in a Court of competent jurisdiction, and that, if they do not appear to vindicate their rights, judgment may be given in their absence." I found, when this matter was before me on the 2nd of November 2011: "Whilst we are not quite at the stage where the ship has -- 4 of 17 -- 5 JUDGMENT 1 10 20 30 40 50 60 been arrested, it is plain enough on the materials before me that this is an action in rem. On the face of the materials before me, it is clear that the Court has jurisdiction in the matter and that the proceeding as initiated in the Court was properly initiated." The matter of jurisdiction has not at any stage of the proceeding been placed in dispute. The Owners The proceeding on the amended writ which was tried before me was on its terms commenced against "the ship Captain Senrab" and the defendant was named as "the owners of the ship Captain Senrab". In my reasons of the 2nd of November 2011, I noted: “The rules provide at rule 15 that the initiating process in a proceeding commenced as an action in rem must specify a relevant person in relation to a maritime claim concerned as a defendant and that a relevant person may be specified by reference to ownership of, or other relevant relationship with, the ship or other property concerned. In light of that provision, it can be understood why the plaintiffs named the defendant as 'the owners of the ship Captain Senrab'." -- 5 of 17 -- 6 JUDGMENT 1 10 20 30 40 50 60 The writ named as relevant persons William Donald Nixon and Pamela May Nixon. They each filed appearances stating inter alia: "My relationship with the ship against which this proceeding has been commenced is that- (a) I am the registered owner of the ship. (b) I am the vendor of the ship." Their reference to being vendors is explicable from the evidence which emerged at trial that Mr and Mrs Nixon, while still the registered owners of the vessel, have sold it to Graeme Siegmund Roggensack. Mr Roggensack also filed an appearance, stating inter alia: "My relationship with the ship against which this proceeding has been commenced is that- (a) I am the residential tenant of the ship. (b) I am purchasing on vendor terms." At the trial, Mr Roggensack appeared on his own behalf, and Mr Nixon appeared for himself as well as Mrs Nixon, who attended the proceeding throughout but elected to remain in the public gallery. On the evidence adduced before me, Mr Roggensack has paid the Nixons in full for his purchase of the vessel. In the absence of relevant legislative provisions regarding the legal -- 6 of 17 -- 7 JUDGMENT 1 10 20 30 40 50 60 ownership of the vessel, I agree with Mr Jonsson's submission on behalf of the plaintiff that it is likely ownership of the vessel would have passed by now and probably back at the time of the contract or the taking of possession under it. However, there are relevant legislative provisions, in the Shipping Registration Act 1981 (Cth) which, like systems of land title registration, involve a system of compulsory registration, creating titles to ships. That Act at section 36 requires the transfer of a ship to be by bill of sale, which is registered. There has been no such registration pertaining to the Captain Senrab. That Act defines “owner” as a person registered as the owner. The word "owner" also appears in the Admiralty Act and it is well settled that where it there appears it encompasses not only registered ownership, but also beneficial ownership or ownership in equity - see Owners of The Ship "Shin Kobe Maru" v. Empire Shipping Co Inc (1994) 181 CLR 404 at 423; and Malaysia Shipyard and Engineering SDN BHD v. The "Iron Shortland" (1995) 59 FCR 535 at 544 and 547 to 548. Mr Jonsson of counsel has drawn my attention to some observations in Kent v. The Vessel "Maria Luisa" (No 2) (2003) 130 FCR 12 at paragraph 66, to the effect that if a person has -- 7 of 17 -- 8 JUDGMENT 1 10 20 30 40 50 60 contractual rights in relation to a ship, which, if performed, will result in the person becoming the owner of the ship, then the person will be regarded in equity as the owner of the ship, provided the specific performance to the contract would be decreed. However, Mr Jonsson submits that that statement is not universally accurate. I agree that on a strict equitable analysis, it is only at the point that a purchaser completes full payment of the purchase price that the purchaser is considered, in equity, to become the true owner of the asset purchased. Even though prior to that, specific performance might be available to compel performance of a contract of sale, on a purely equitable analysis, the purchaser merely has an equitable lien over the asset concerned to secure repayment of that which has been paid. It is not until the point that the full purchase price has been paid that the vendor is considered to thereafter hold the asset on trust for the beneficiary - see the analysis in Rose v. Watson (1864) 33 LJ Ch (NS) 385 at 389-390, which was cited with implicit approval in Tanwar Enterprises Pty Ltd v. Cauchi (2003) 217 CLR 315 at footnote 95. On the evidence here, that point was reached in about October of 2010. It ought further be noted that the Shipping Registration Act does not exclude equities and provides at section 47 that beneficial interests may be enforced by or against the owner in the same manner as in respect of any other personal property. -- 8 of 17 -- 9 JUDGMENT 1 10 20 30 40 50 60 On the evidence, the Nixons remain the legal owner of the vessel, but Mr Roggensack is the equitable owner. Beyond Mr Roggensack's ownership interest, he has, on the evidence, been in possession of the ship and master of the ship since 2007. For reasons which will become apparent, that founds a basis for his liability quite apart from the issue of ownership. Liability The evidence establishes Mr Nixon has moored the vessel for periods since September 2010 at Commercial Fishing Base Number 1, which is part of the facilities of the plaintiff within the plaintiff's port area. The plaintiff is the port authority responsible for the port area known as the port of Cairns pursuant to section 5 and schedule 2 of the Transport Infrastructure (Ports) Regulation 2005 (Qld). The Transport Infrastructure Act 1994 provides, at section 275, that the functions of a port authority are, inter alia: "(a) to establish, manage, and operate effective and efficient port facilities and services in its port; and… (d) to keep appropriate levels of safety and security in the provision and operation of the facilities and services; and (e) to provide other services incidental to the performance of its other functions or likely to enhance the usage of the port…" More importantly, the Act provides, at section 279(1), "A port -- 9 of 17 -- 10 JUDGMENT 1 10 20 30 40 50 60 authority may impose a charge for the use of its port area." "Use", is not defined and ought to be given its ordinary meaning. It is section 279 which provided the plaintiff in this case with the authority to impose the charges, which it did. Section 280 of the Act relevantly provides: "If a charge is payable in relation to a ship, the following persons are jointly and separably liable for the charge - (a) the owner of the ship; (b) the master of the ship…" This provision has the consequence that the ownership analysis above is in a sense academic, at least so far as Mr Roggensack is concerned. For, whatever might be said as to the state of his ownership of the ship, it is plainly established and accepted that he was and is the master of the ship. The ownership analysis above is, thus, of greater relevance so far as the Nixons are concerned, and for the reasons already given, I find that they are, within the meaning of section 280 of the Transport Infrastructure Act, owners of the ship. It follows, subject to proper proof of the action and consideration of any defences, that, at least prima facie, both the Nixons and Mr Roggensack would be liable for the charges levied, that is, the charges with which this case is concerned. -- 10 of 17 -- 11 JUDGMENT 1 10 20 30 40 50 60 I note for completeness that section 281C of the Act provides that a charge imposed is payable within a reasonable time, and that if it is not paid on or before the day of the charge is due, interest is payable on the unpaid amount of the charge at a reasonable rate decided by the port authority or relevant entity. The evidence shows the plaintiff did impose a charge pursuant to section 279 for the use of its port area. The affidavit of Michael Arthur Barnett exhibits the charges which were settled by the plaintiff for the years 2010 and 2011, that Exhibit is MAB3 and MAB4. It exhibits also the invoices that were issued in respect of the Captain Senrab during the era in question. The amounts invoiced are in accordance with the amounts settled in the plaintiff's charges, referred to in Exhibits MAB3 and MAB4. Importantly, when the invoices are read in conjunction with those exhibits it is readily apparent, setting aside the invoicing for electricity to which I will shortly come, that the invoices were for the cost of providing the berth to the Captain Senrab. The quantum flowing from the exhibited invoices and the relevant calculation of interest is set out in Exhibit A. It also includes the amounts pertaining to electricity charges which were also invoiced. Those invoices were exhibited to Mr Barnett's affidavit. Mr Roggensack, in the course of his evidence, expressly admitted liability for those charges. -- 11 of 17 -- 12 JUDGMENT 1 10 20 30 40 50 60 The plaintiff has proved what presents as a straightforward case. The liability of the owner and the master under section 280 will flow if the alleged charges are payable in relation to a ship. There is no dispute the ship was berthed during the periods invoiced. There is no dispute with the accuracy of the amounts invoiced. There is no dispute that GST was also payable on the amounts. There is no dispute with the right to charge interest, or the calculated amount of interest. What then is the defence? It is submitted, in effect, that the plaintiff failed to adequately maintain the toilet and parkland facilities on the port area of land adjacent to the berth area where the vessel was berthed. It is submitted that because of this the plaintiff was in breach of its lease of the port area, and/or in breach of its statutory obligations. However, no basis in law has been advanced as to how this means the charges the evidence shows were lawfully levied were and are not payable. I can identify no such basis in this case. It appears Mr Roggensack conceived of some sort of quasi- contractual relationship where he was a customer withholding payment because he was unhappy he had not received full value for the money he was being charged. The flaw with that approach is plainly legal in that the obligation to pay derives from his statutory liability, not some sort of contractual or customer and service provider arrangement. But it is also factually flawed in that the charges were for -- 12 of 17 -- 13 JUDGMENT 1 10 20 30 40 50 60 electricity and for the berth, and there is simply no dispute that both were in fact provided and used. In short, no legitimate defence has been advanced and the plaintiff's case has been proved. Quantum For the reasons already given, I am satisfied that the Exhibit A calculations of the total amounts invoiced in respect of the berths and of electricity, the calculations of the progressively accumulating amount owing by virtue of the ongoing berthing of the vessel, and calculations of GST and interest are accurate. It gives rise to a total of $9,187.89 for the claim, and $521.71 for interest thereon. Discussion of orders sought The draft order with which I have been provided by counsel for the plaintiff seeks judgment in the abovementioned amounts against (a) the ship Captain Senrab; (b) William Donald Nixon and Pamela May Nixon; and (c) Graeme Siegmund Roggensack. It is uncontroversial in this action in rem that there ought be judgment for the plaintiff as against the ship Captain Senrab. The Admiralty Act relevantly provides at section 31: "(1) Where judgment is given for the plaintiff in a proceeding on a maritime claim commenced as an action in rem against a ship or other property, the extent to which -- 13 of 17 -- 14 JUDGMENT 1 10 20 30 40 50 60 a defendant in the proceeding who has entered an appearance, and is a relevant person in relation to the claim, is personally liable on the judgment, is not limited by the value of the ship or property; (2) Where judgment is given for the plaintiff in a proceeding on a maritime claim commenced as an action in rem against a ship or other property, a defendant in the proceeding who has entered an appearance and is not a relevant person in relation to the claim, is not personally liable in the judgment for the payment of money in respect of claim, except so far as the judgment is for costs against that defendant..." Section (3) of the Act defines relevant person: "Relevant person, in relation to a maritime claim, means a person who would be liable on the claim in a proceeding commenced as an action in personam." The liability, both jointly and severally on the part of the owner and the master flowing from section 280, read in conjunction with the other provisions, in my view makes it plain that the Nixons and Mr Roggensack are “relevant persons” for the purposes of my orders. It follows it is appropriate that judgment be against the ship Captain Senrab, the Nixons and Mr Roggensack. The plaintiff's draft order contemplates an order that the plaintiff be at liberty forthwith to cause the service of a -- 14 of 17 -- 15 JUDGMENT 1 10 20 30 40 50 60 warrant of arrest against the ship Captain Senrab. As already discussed, it was the plaintiff who, no doubt in the interests of cost, sought the order from me which, in effect, stayed that process pending further order with the obvious intent of re-enlivening their liberty to cause the service of the warrant in the event of their success in this action. It is uncontroversial that I ought to make the order sought now. The draft order seeks the plaintiff's costs of and incidental to the action including reserved costs to be assessed on the standard basis. In the circumstances of this case, there is no debate that costs ought not follow the event, and indeed no arguments advanced to suggest that the normal course ought not flow from the plaintiff's success. The only issue that troubled me related to whether the scale for some or all of the costs should be less than this Court's scale because the quantum of the amounts actually sought in this action is an amount that could have been pursued, at least against the Nixons or Mr Roggensack personally, in a lower Court such as the Magistrates Court or QCAT. However, there are a number of factors weighing against me exercising my discretion to award costs on a lesser scale than this Court's. They are, in particular: 1) that the action was properly brought in this Court; 2) that this action in rem was brought in this Court for good reason, namely its effect of securing the debt; and (3) to have pursued the debt personally in the -- 15 of 17 -- 16 JUDGMENT 1 10 20 30 40 50 60 lower Courts as against the Nixons and Mr Roggensack would have involved the pursuit of multiple actions, namely one in the lower Court as well as the action in rem in this Court, which in itself would have added to the costs of the process. There would also have been an indirect cost accruing, for the hearing of this matter in this Court has been expedited within a time-frame which is unlikely to have occurred in the Magistrates Court or even QCAT. Given those considerations I am ultimately persuaded that I ought in ordering costs not depart from the position ordinarily arising, namely that the costs will be assessed on the standard basis. In the absence of any more specific order about that, obviously it will be costs on the standard basis in respect of this Court and that is my intention. Orders: I order as per the draft order initialled by me and placed with the papers, which draft order for the record reads: (1) There be judgment for the plaintiff against, (a) the ship Captain Senrab (b) William Donald Nixon and Pamela May Nixon and (c) Graeme Siegmund Roggensack, for the sum of $9,187.89 for claim, and for $521.71 for interest thereon, and for the plaintiff's costs of and incidental to this action (including reserved costs) to be assessed on the standard basis. (2) The plaintiff be at liberty forthwith to cause the service of a warrant of arrest against the ship Captain Senrab. -- 16 of 17 -- 17 JUDGMENT 1 10 20 30 40 50 60 (3) There be liberty to any party to apply upon two days' written notice to the other parties. ----- -- 17 of 17 --