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  • Unreported Judgment

McConaghy v The Ship "MV2000"

 

[2020] QSC 283

SUPREME COURT OF QUEENSLAND

CITATION:

McConaghy v The Ship “MV2000” [2020] QSC 283

PARTIES:

LAWRENCE McCONAGHY

(first plaintiff/ applicant)

JOANNE VERNEY

(second plaintiff/ applicant)

v

THE SHIP MV2000
(first defendant/ respondent)

FORTITUDE INVESTMENTS AUSTRALIA PTY LTD

ACN 629 489 149

(second defendant/ respondent).

FILE NO/S:

SC No 189 of 2020

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED EX

TEMPORE ON:

14 August 2020

DELIVERED AT:

Cairns

HEARING DATE:

14 August 2020

JUDGE:

Henry J

ORDER:

  1. Fortitude Investments Australia Pty Ltd (“Fortitude”) be named as second defendant by:
    1. (a)
      the Registrar amending the writ to include Fortitude as the second defendant;
    2. (b)
      the plaintiff filing and serving an amended statement of claim in which Fortitude is named as the second defendant and including such consequential amendments to its pleadings as may be appropriate within 14 days;
    3. (c)
      the defendants file and serve an amended statement of claim in which Fortitude is named as second defendant and including such consequential amendments to its pleadings as may be appropriate within 21 days.
  2. The costs of the application be costs in the cause.

CATCHWORDS:

SHIPPING AND NAVIGATION – ADMIRALTY JURISDICTION, LAW AND PRACTICE – PRACTICE MATTERS – PARTICULAR JURISDICTIONS – QUEENSLAND – where a writ was filed commencing an action in rem against a ship naming Fortitude Investments Australia Pty Ltd as the “relevant person – where a conditional appearance and later an unconditional appearance was entered by Fortitude Investments Australia Pty Ltd which described it as the “owner of the vessel” – where the writ named the ship as the defendant – where the later statement of claim named the ship as the defendant – where “the defendant” filed a defence and counterclaim – where the applicant applied to strike-out the counterclaim on the basis that it was made by the ship which was not a legal person – whether Fortitude Investments Australia Pty Ltd should be named as the second defendant

Admiralty Act 1988 (Cth), s 3, s 31

Admiralty Rules 1988 (Cth), r 6, r 15, r 16, r 19, r 22, r 22(1), r 22(2)

Uniform Civil Procedure Rules 1999 (Qld), r 6, r 375, r 383

Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529, cited

COUNSEL:

N Wallwork for the plaintiffs/ applicants

A Marinac (sol) for the defendants/ respondents

SOLICITORS:

Atherton Tablelands Law for the plaintiffs/ applicants

Pacific Maritime Lawyers for the defendants/ respondents

HIS HONOUR:   The plaintiffs make application to strike out a counterclaim on the basis that it is incompetent, allegedly having been commenced by a ship and not a legal person.  The source of that allegation is that the defendant named in the statement of claim is the ship MV2000

The ship MV2000 is owned by Fortitude Investments Australia Pty Ltd, which I will refer to as “Fortitude”, and which, in the nomenclature of admiralty law is named in the statement of claim as the “relevant person”.  Section 3 Admiralty Act 1988 (Cth) defines “relevant person” as follows:

“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.” 

An action in personam, that is, an action against a specific person, is one of two general forms of action in admiralty law.  The other is an action in rem, that is, an action against property, sometimes referred to as the res.  The proceeding in which the application was filed was commenced as an action in rem by writ against the ship MV2000 claiming about $28,000 “as a maritime claim against the ship”.  The Admiralty Act 1988 permits of such an action against a ship, notwithstanding that the ship is not a legal person. 

The commencement of the proceeding was by writ pursuant to the Admiralty Rules 1988 (Cth) rather than by claim under the Uniform Civil Procedure Rules 1999 (Qld).  The commencement of such a proceeding must, pursuant to r 19 Admiralty Rules, be by way of writ in accordance with form 6 of those rules. 

The writ conformed with form 6 of the Admiralty Rules and, as the form provides, named the relevant person.  It did so in these terms:

“RELEVANT PERSON:  The plaintiff specifies the relevant person as FORTITUDE INVESTMENTS AUSTRALIA PTY LTD T/A ABROLHOS ADVENTURES ACN 629489149 to be served with this process and as a Defendant to these proceedings.”

That in so naming the relevant person the language “as a defendant to these proceedings” was used is unremarkable.  Rule 15 of the Admiralty Rules provides: 

“(1) Initiating process in a proceeding commenced as an action in rem must specify a relevant person in relation to the maritime claim concerned as a defendant.

  1. (2)
    A relevant person may be specified by reference to ownership of, or other relevant relationship with, the ship or other property concerned.”

Rule 16(1) goes on to provide the initiating process in such an action must identify the ship concerned in relation to the maritime claim.  The writ appears to have done

both of those things.  However, as to the title to the writ, its reference to any defendant was in the singular, namely, to the ship MV 2000

That Fortitude was not named as a defendant in the title, yet the form of language naming it as a relevant person contemplated it being a defendant, is explained by the state of flux in play at the time of the filing of the writ.  It was not yet known whether or not an appearance would be entered by Fortitude and, if so, whether it would be an unconditional appearance. 

The writ was filed on 6 April 2020.  There was a preliminary skirmish involving the arrest of the ship.  The upshot of all of that was that the ship was released when Fortitude paid $110,000 security for the plaintiff’s claim. 

The plaintiffs’ statement of claim filed 1 May alleges they had an agreement with Fortitude to restore and relocate the MV2000 and that Fortitude failed to pay some of its invoices.  The plaintiffs claim about $28,000.  Prior to the filing of the statement of claim Fortitude had entered a conditional appearance filed 15 April and, more relevantly, an unconditional appearance filed 22 April.  The significance of the filing of the unconditional appearance is a topic to which I will return. 

The unconditional appearance entered by Fortitude included information that its relationship with the ship was “owner of the vessel”.  Fortitude’s statement of claim had named Fortitude as the relevant person, just as the writ had done. 

A defence was filed on 8 June.  Like the statement of claim, it referred to the ship MV2000 as the defendant in the singular.  It contained various admissions and denials, the upshot being that it denied the plaintiff’s pleaded entitlement to relief.  It included a counter-claim pleaded as “made by the defendant against the first and second plaintiffs”.  Literally read, the defendant remained named solely in the title of the action as the ship MV2000, notwithstanding that Fortitude was named as the relevant person and, indeed, in the writ was characterised as being a defendant to the proceedings.  The counter-claim alleged repudiation and various breaches of the agreement and a breach of fiduciary duty and claimed a variety of essentially financial relief totalling considerably more than the quantum of the plaintiff’s claim.

It is tolerably clear from the pleadings that despite this being and remaining an action in rem, it will in substance proceed as an action in personam.  Indeed, Fortitude’s entry of an unconditional appearance ensures that is so.  As much was explained by the following observations of Gibbs J in Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529 at 538:

“An action in rem is an action against a ship itself.  However, when the defendants to such an action have entered an appearance, judgment may be enforced against them personally, and to the full extent of the damages proved, even though those damages exceed the value of the ship.  After appearances have been entered the action proceeds as if it were an action in personam, although it does not cease to be an action in rem.” (Citations omitted)

His Honour went on to observe at 539:

“As a general rule, an unconditional appearance amounts to a submission to the jurisdiction of the court and to a waiver of irregularity, eg, in the manner of service.  However, only a defendant can enter an appearance. … In an action in rem the persons who may become defendants, if they choose to appear, are the owners and others interested in the ship.”

Consistently with the traditional principles explained by Gibbs J, s 31 of the Admiralty Act speaks of a defendant in the proceeding who has entered an appearance and is a relevant person as being personally liable to an extent not limited by the ship’s value.  The principles recited by Gibbs J, which the parties do not dispute and which are consistent with the provisions of the Admiralty Act, mean that Fortitude is a defendant and quite entitled to bring a counter-claim. 

In truth, the issue the parties have struggled to agree on is one of form, not substance.  It derives from the need for the pleadings to refer to a defendant, Fortitude, who is by operation of law a defendant but has not been named so in the title to the writ, statement of claim or defence and counter-claim or, indeed for that matter, a reply which has been filed.

Admiralty Rules r 22(1) provides:

“… [T]he plaintiff must … file and serve a statement of claim … on each party who has entered an appearance.” 

This the defendants did.  Fortitude was served. 

Rule 22(2) Admiralty Rules contemplates the statement of claim must be in accordance with the rules of the court concerned, in other words, of whichever court the exercise of the admiralty jurisdiction is occurring in.  In this instance, it is the Supreme Court of Queensland. 

In Queensland, the relevant rules of court are the Uniform Civil Procedure Rules and the form for a statement of claim, form 16, contemplates a title which names plaintiffs and defendants only, not representative persons.  Rule 6 Admiralty Rules provides the Admiralty Rules do not exclude or limit the operation of the rules of the court exercising the Act’s jurisdiction.

It follows, I can apply Queensland’s Uniform Civil Procedure Rules to fill the procedural void not covered by the Admiralty Rules to address the consequence, for a proceeding’s naming of parties, of a relevant person becoming a defendant, as Fortitude has.  I am empowered by Queensland’s Uniform Civil Procedure Rules to order that the originating process be amended to name Fortitude as a defendant, as it should be, since r 6 Uniform Civil Procedure Rules contemplates that an originating process must include the names of all parties.  Since the filing of the unconditional appearance Fortitude has been a party.  Rule 383 allows me to order the registrar to amend a document and I will order the registrar to make the relevant amendment to the writ in order to save the parties costs.

I would make a similar order for the remaining documents, however, quite apart from amending the title of those documents, it is likely that some at least minor amendments will need to be made to the substance of the pleadings to accommodate appropriate references to distinguish between what will become the first and second defendants.  So in respect of the statement of claim and defence, I will deploy r 375 to order the respective parties to file amended versions thereof. 

I note a reply has been filed, but these developments make it inevitable it will be doubtless the subject of an amended document constituted by a reply and answer.  So I will not go so far as to make any particular order about it and doubtless its eventual form will reflect the spirit of the orders I have already made. 

Before moving to my final orders, on the question of costs I intend to order that costs be in the cause. 

I am conscious that the applicant, whilst not successful in the relief sought, has nonetheless succeeded in gaining relief of a kind that will allow the matter to go forward.  However, the character of the relief that has been gained is consistent with the reality, contrary to the assertion that was sought to be advanced by the application, that Fortitude can properly plead its counter-claim in the defence filed.  I am also conscious from a close perusal of the correspondence between the parties that each side has in good faith struggled to agree with the other as to how, what in reality was a procedural void, ought be remedied in circumstances where, ultimately, it was a lack of guidance from the present state of the Admiralty Rules.  It verged on inevitable that the Court would have to assist the parties.  Against that background it is appropriate that costs be in the cause. 

My orders are:

  1. Fortitude Investments Australia Pty Ltd (“Fortitude”) be named as second defendant by:
  1. (a)
    the Registrar amending the writ to include Fortitude as the second defendant;
  2. (b)
    the plaintiff filing and serving an amended statement of claim in which Fortitude is named as the second defendant and including such consequential amendments to its pleadings as may be appropriate within 14 days;
  3. (c)
    the defendants file and serve an amended statement of claim in which Fortitude is named as second defendant and including such consequential amendments to its pleadings as may be appropriate within 21 days.
  1. The costs of the application be costs in the cause.
 
Close

Editorial Notes

  • Published Case Name:

    McConaghy v The Ship "MV2000"

  • Shortened Case Name:

    McConaghy v The Ship "MV2000"

  • MNC:

    [2020] QSC 283

  • Court:

    QSC

  • Judge(s):

    Henry J

  • Date:

    14 Aug 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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