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Ocean Harvest Fisheries and Freight PNG Ltd v M & G Hoschke Pty Ltd

 

[2003] QSC 206

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

JONES J

Claim No 223 of 2003

OCEAN HARVEST FISHERIES AND FREIGHT PNG LTD (ARBN 10346026)

Plaintiff

and

 

M & G HOSCHKE PTY LTD (ACN 058 917 623)

First Defendant

and

 

MICHAEL NOEL HOSCHKE AND GAYLENE HOSCHKE

Second Defendant

CAIRNS

DATE 28/05/2003

JUDGMENT

HIS HONOUR: This is an application on the part of the plaintiff for an interlocutory injunction seeking by it a restraint on the defendants from removing a vessel, the “Archer River”, from the territorial waters of Papua New Guinea.

There is between the parties a contract in relation to the sale and use of this particular vessel. The terms of the contract are not clearly defined, on the material before me, and will necessarily involve a construing of a number of documents. This, undoubtedly, gives rise to the serious question to be tried.

The parties entered into discussions in October 2002. Some memorandum of understanding was drawn up on the 20th of October 2002. That document, after further discussions in November, appears to have had its terms amended on the 27th of December 2002. After the parties received legal advice from a solicitor a further memorandum of understanding was executed on the 23rd of January 2003.

That more formal document commences with this paragraph:

“Ocean Harvest Fisheries and Freight PNG Ltd (“OHFF”) and M & G Hoschke Pty Ltd as trustee for the M & G Hoschke Family Trust (“M&GH”) have previously documented and signed a memorandum of understanding on 20th of October 2002 that was subsequently amended on 27th of December 2002 (“the original agreement”)”.

The terms of what is euphemistically described as the original agreement are matters about which there is no agreement between the parties and will have to be determined at trial.

The formal document then goes on to record, in paragraph 1.1, the following:

“The terms and condition of the original agreement are relied upon and form part of the ongoing working relationship between the parties insofar as they are consistent with this memorandum”.

What, it seems to me, without reaching any final determination, was envisaged in the original agreement — the terms of which as I have mentioned I have not reached any conclusion — was the sale of the vessel after it had been leased for a period of 12 months and worked by Mr Michael Hoschke. The arrangements for the hire, according to those earlier agreements, was a monthly lease payment and some arrangement for the remuneration of Mr Hoschke for his labour.

The formal document records, at paragraph 3.1, that:

“M&GH will assign and transfer the vessel, her gear, plant and equipment, to OHFF free from all liens, encumbrances and mortgages”:

It does not make any specific reference to the consideration for such transfer, nor does it make any reference to whether the assignment would take effect immediately by virtue of those terms or whether it was in the intention of the parties when they signed this document that the transfer of interest would take place at the end of the term of the lease and for the price referred to in the original agreement, US$250,000.

The documents of transfer referred to in the original agreement as a bill of sale was to be held in escrow until the time arose for the payment of purchase price and transfer of interest.

The formal document does not refer to any lease but it refers to the memorandum having a term of 12 months minimum, commencing on the date of execution. This, in its own terms, seems somewhat inconsistent with the notion of an immediate transfer of interest. Also, by paragraph 2.3 of the formal agreement the following appears:

“If, for whatever reason, either party is unable to fulfil their responsibilities or duties under this memorandum either party shall be at liberty to terminate the venture in a manner that is fair, equitable and workable for all parties concerned”.

So, the right to terminate is not dependent upon any breach by the other party, but it would seem to operate even on an election by a party who feels unable to fulfil that party's own responsibilities. That again seems to me, without reaching any conclusion on the matter, to be contrary to a situation of transferring ownership of the vessel. These matters, of course, give rise to the serious question to be tried.

The only financial return that this formal document provides for is a remuneration for the defendants of 20 per cent of the net revenue of the anticipated fishing and marine activities. The agreement requires Mr Hoschke to skipper the vessel.

It is completely unknown what 20 per cent of the net revenue would amount to. It might well be, as Mr Henry of Counsel on behalf of the plaintiff suggested, that there was an expectation of quite large profits but it would seem, even with that expectation, unusual for a person to part entirely with his interests in a vessel said to be worth US$250,000 in the expectation, only, of making a large profit.

I have identified just a few of what seem to be the salient features of the agreement and have also identified that the first serious question to be determined is what in fact are the terms of the agreement. The first requirement of seeking the injunction has been made out. I refer to the requirements identified by Gibbs CJ in Australian Coarse Grain Pool Pty Ltd v The Barley Marketing Board 57 ALJA 425 that there is required to be established a serious question to be tried, and I am satisfied that has been done.

The next question is the balance of convenience. It is argued on behalf of the plaintiff that not to have the vessel, and in fact this particular vessel, at this time when the anticipated operation is in its embryonic stages will constitute a serious inconvenience for the plaintiff. The defendant suggests that it would be an easy matter to find another equivalent vessel to continue the operation and, indeed, points to the fact that before arrangements were made with the defendants for the “Archer River” the plaintiffs were considering entering into some sort of similar arrangement with the owners of the vessel “Nimbus”. The defendant also asserts that there are a large number of vessels which would be capable of undertaking the operation.

Even accepting that is no doubt so, there would be a delay in perhaps preparing the vessel for such operation and expenses incurred, as was indeed the situation with the “Archer River”. So, it is argued that the plaintiff is simply not able to get another boat quickly, but that this boat was chosen, it was already part of the operation, and the long term plan for this fishing operation was that the boat would be purchased from the returns of the operation at the end of the 12 month period.

Against that, the inconvenience for the defendants is that this boat is indeed their livelihood. Without it they have no means of earning an income; that their attempt to gain remuneration by the proposed operation was thwarted by the fact that in the few months of its operation it was doing so illegally without a fishing licence, which was to be arranged by the plaintiff, and that it was boarded by Papua New Guinea fishing authorities and the catch was confiscated.

Looking broadly at the plaintiff's claim it seems to me that its losses, if they establish that they are entitled to recover losses, would be satisfied by an award of damages. Any delay in the receipt of profit by now having to start the operation again with a new vessel would sound in damages which could be estimated. Any difficulties that arise from not having, at the end of the term of the agreement, this particular vessel for purchase, again could be compensated by an award of damages based on the loss of a chance. That loss of chance, of course, has to be looked at in the light of that term of the agreement (2.3) that either party had the liberty to terminate the venture in a manner that was fair and equitable. It might be the invocation of that term that the plaintiff relies upon for the purpose of recouping of expenses that have been outlaid to prepare the vessel and loss of past and potential profits.

In my view the balance of convenience falls to be decided on the basis that the defendant should retain possession of the vessel. It would be far easier, in my view, for this venture to continue with the hiring of another equivalent vessel than it would be for the defendant to lose the means of its and their livelihood by having to outlay monies in excess of US$250,000 to buy a replacement vessel.

For those reasons I will refuse the application.

HIS HONOUR: I will reserve the question of costs for trial.

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Editorial Notes

  • Published Case Name:

    Ocean Harvest Fisheries and Freight Png Ltd v M & G Hoschke Pty Ltd

  • Shortened Case Name:

    Ocean Harvest Fisheries and Freight PNG Ltd v M & G Hoschke Pty Ltd

  • MNC:

    [2003] QSC 206

  • Court:

    QSC

  • Judge(s):

    Jones J

  • Date:

    28 May 2003

Litigation History

No Litigation History

Appeal Status

No Status