Dan-Bunkering (Singapore) Pte Ltd v The Ship Yangtze Fortune (No 3)

• Jurisdiction: Australia Federal only
• Judgment Date: 12 March 2024
• Neutral Citation: [2024] FCA 219
• Date: 12 March 2024
• Court: Federal Court

Federal Court of Australia

Dan-Bunkering (Singapore) Pte Ltd v The Ship Yangtze Fortune (No 3) [2024] FCA 219

File number:	NSD 958 of 2022
Judgment of:	STEWART J
Date of judgment:	12 March 2024
Catchwords:	ADMIRALTY – application for leave to claim out of time upon the fund constituted by the proceeds of judicial sale of the ship Yangtze Fortune – liability of the fund for demise charterer’s debts – construction of ss 18 and 24 of the Admiralty Act 1988 (Cth) and rr 9.02 and 9.03 of the Federal Court Rules 2011 (Cth) – whether applicant has reasonable prospects of success in its claim – where evidence that charterparty terminated before judicial sale of ship – where applicant made conscious choice not to take steps in the proceeding – application refused
Legislation:	Admiralty Act 1988 (Cth) ss 3(1), 17, 18, 19, 24 Admiralty Rules 1988 (Cth) Pt II Div 2 Federal Court Rules 2011 (Cth) rr 9.02, 9.03
Cases cited:	Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337 Dauguet v Centrelink [2015] FCA 395 Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 DGM Commodities Corporation v Sea Metropolitan SA (The “Andra”) [2012] 2 Lloyd’s Rep 587 Taxidiotiki-Touristiki-Nautiliaki Ltd v The Owners, Demise Charterers of the Vessel 'Columbus' [2021] EWHC 310 The Sanko Mineral[2014] EWHC 3927; [2015] 1 Lloyd’s Rep 247 The Ship ‘Hako Endeavour’ v Programmed Total Marine Services Pty Ltd [2013] FCAFC 21; 211 FCR 369 ; Australian Law Reform Commission, Civil Admiralty Jurisdiction (Report No 33, 1986) Stewart AM, “The owner’s vulnerability to the liabilities of the demise charterer” (2015) 29 ANZ Mar LJ 85
Division:	General Division
Registry:	New South Wales
National Practice Area:	Admiralty and Maritime
Number of paragraphs:	71
Date of hearing:	6 March 2024
Counsel for the Plaintiff:	C L W Street
Solicitor for the Plaintiff:	Colin Biggers & Paisley
Counsel for the Defendant:	The defendant did not appear.
Counsel for the Applicant, China Merchants Energy Trading (Singapore) Pte Ltd:	A Elizabeth (written submissions also by G O’Mahoney)
Solicitor for the Applicant, China Merchants Energy Trading (Singapore) Pte Ltd:	Norton White
Counsel for the Interested Person, Soar Harmony Shipping Ltd:	G J Nell SC
Solicitor for the Interested Person, Soar Harmony Shipping Ltd:	Mills Oakley
Solicitor for the Interested Person, Australasian Global Exports Pty Ltd:	W Naseem of Cocks Macnish

ORDERS

		NSD 958 of 2022
BETWEEN:	DAN-BUNKERING (SINGAPORE) PTE LTD Plaintiff
AND:	THE SHIP "YANGTZE FORTUNE" IMO 9336282 Defendant ; CHINA MERCHANTS ENERGY TRADING (SINGAPORE) PTE LTD Applicant ; SOAR HARMONY SHIPPING LTD Interested Person ; AUSTRALASIAN GLOBAL EXPORTS PTY LTD Interested Person ; ADMIRALTY MARSHAL Interested Person

order made by:	STEWART J
DATE OF ORDER:	12 MARCH 2024

THE COURT ORDERS THAT:

1. The amended interlocutory application filed by China Merchants Energy Trading (Singapore) Pte Ltd on 6 March 2024 be dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STEWART J:

Introduction

1. This is an application by China Merchants Energy Trading (Singapore) Pte Ltd (CMET) for, in effect, the following relief:

1. that it be granted leave to file and serve a statement of claim in the principal proceeding in respect of its claim against the proceeds of the sale of the mv Yangtze Fortune; or

2. that it be granted leave to be joined as plaintiff in the proceeding; and

3. timetabling orders in relation to the proof of its claim and the determination of priorities.

2. The two issues to be decided in considering whether to exercise a discretion in CMET’s favour to grant it leave to file and serve a statement of claim against the fund established from the proceeds of the judicial sale of the vessel are, first, whether it has established reasonable prospects of success in the claim that it wishes to pursue – it being common ground that if it has no such prospects then there is no point in granting it leave – and, second, whether its failure to commence a proceeding to enforce that claim at an earlier time when it should have done so has been adequately explained.

3. As will be seen, the question in relation to prospects of success boils down to the construction of and the inter-relationship between ss 18 and 24 of the Admiralty Act 1988 (Cth). More particularly, does CMET have reasonable prospects of success in contending that when “the proceeding” (in s 18(b)) is (or was) commenced the relevant person is (or was), or is to be regarded as, the demise charterer of the vessel. For the reasons that follow, I have concluded that CMET’s claim in that regard is bound to fail and for that reason leave must be refused. In any event, I have also decided that the explanation for CMET’s delay in commencing its proceeding does not justify the position that it took not to do so when it should have done so and for that reason leave should be refused.

4. On the question of joinder, for the reasons that follow I have concluded that CMET cannot as a matter of power or, alternatively, discretion, join the present admiralty action as a plaintiff against the objection of the existing plaintiff. That alternative route to the contention that since s 18(b) was satisfied when the present proceeding was commenced, it can be regarded as so satisfied for CMET, is also not available.

The relevant facts

5. In setting out the relevant facts, I do not purport to make final factual findings between the parties, in particular because this is an interlocutory application and some of the facts may be the subject of contest at the priorities hearing in due course. Rather, I make factual findings for the purposes of CMET’s interlocutory application based on the evidence adduced in that application.

6. Before and at the commencement of the events traversed below, the vessel was owned by Soar Harmony Shipping Ltd and bareboat chartered to Yangtze Fortune Co Ltd on an amended Barecon 2001 form.

7. On 10 November 2022, the plaintiff in the current proceeding, Dan-Bunkering (Singapore) Pte Ltd, issued a writ against the vessel naming Yangtze as the relevant person, ie the person who would be liable on the claim in a proceeding commenced as an action in personam (Admiralty Act, s 3(1)). That was on the basis that Dan-Bunkering sold bunker fuel supplied to the vessel to Yangtze. It relied on s 18 of the Admiralty Act for that claim.

8. On 11 November 2022, Yangtze gave notice to Soar Harmony that it was in “a very hard financial status” and could not perform its obligations under the charterparty. It purported to give “formal notice of termination” of the charterparty.

9. On 16 November 2022, Soar Harmony replied to the “formal notice of termination”, rejecting it and demanding continued performance.

10. On the material currently before me, there is nothing to suggest that Yangtze’s notice of termination was effective. For present purposes it must therefore be accepted that the bareboat charterparty continued after November 2022.

11. On 2...