Wilmington Trust Company (Trustee) v The Ship
"Houston"  FCA 1349
This case arose from a dispute between the Owners and Charterer
of the "Houston" as to whether the vessel could be
properly arrested under the Admiralty Act 1988 (Cth)
(the Act). The question to be decided was whether
the Owners had a 'proprietary maritime claim' within the
meaning of section 4(2) of the Act.
Background of the dispute
In 2010, TBONE chartered the "Houston" for the purpose
of, amongst other things, carrying locomotives to be used for
mining in Western Australia. On 2 December 2015, the Owners served
a notice purporting to terminate the Charterparty due to
non-payment of hire.
TBONE countered that the Owners had previously wrongfully
arrested the vessel in the US, describing this conduct as
"a breach of the covenant of good faith
inherent" in the Charterparty, and for this reason gave
notice of early redelivery of the "Houston". TBONE also
stated that it had paid all hire up to the date of redelivery.
The parties corresponded in relation to the redelivery. However,
TBONE eventually wrote to the Owners that as a direct result of
their "continued bad faith conduct", the
proposed redelivery was delayed. TBONE sought confirmation that the
vessel would not be arrested and asserted that redelivery would be
in accordance with the "charter terms" governing
termination due to "the Owner's breach".
The Owners responded asserting their right to terminate,
demanding hire, and complaining that TBONE ignored demands for
immediate redelivery at various ports of call.
On 23 December 2015, TBONE filed and served a caveat against
arrest. The Owners subsequently issued a writ claiming hire, loss
and damage for detention/conversion of the vessel, indemnity for
loss, damage and expense incurred by Owners, delivery up of the
vessel, interest, and costs. On 11 January 2016, TBONE filed an
interlocutory application seeking an order that the writ be set
aside for want of jurisdiction.
The Owners contended that the claims for loss and damage arising
from the detention/conversion of the "Houston" and for
delivery up of the vessel were claims which related to the
possession of a ship under s 4(2)(a)(i) of the Act. They were, it
was argued, properly characterised as proprietary maritime claims
invoking the Court's jurisdiction under section 16 of the
Section 4(2) of the Act states that a reference to a proprietary
maritime claim is a reference to a claim relating to possession or
ownership of, or title to a ship.
In support of its argument for lack of jurisdiction, TBONE made
a number of submissions which depended upon the acceptance of its
version of the facts advanced in its submissions. For example,
TBONE contended that, after 2 December 2015, it held the
"Houston" as a bailee and, therefore, the Owners'
claims were misconceived because the Owners already held
The Court dismissed the interlocutory application, holding that
the Owners' claims did relate to possession of the ship and
therefore the Court had jurisdiction.
The Court followed the "Shin Kobe Maru" decision in
determining that the proper approach to determining the
jurisdictional question was to examine the legal characterisation
of the claims, not the merits. It was also noted that the High
Court held in "Shin Kobe Maru" that a wide meaning was to
be given to the words "relating to" in s 4(2)(a)
of the Act.
The claim for delivery up was held clearly to be a claim for
possession of a ship in that it was a claim for the delivery up of
possession of the "Houston".
The loss and damage claim was held to be founded upon an
assertion that TBONE, whilst the "Houston" was in its
actual possession, denied the Owners' right to possession. In
the Court's view, that claim was to be characterised as
relating to possession of a ship, as it sought to vindicate the
Owners' asserted right to possession of the
This case serves as a reminder that when asserting that a claim
is outside the Court's jurisdiction under the Act, it is
important to attack the legal basis for the claim, rather than the
merits of the claim. This may be difficult, given that a wide
meaning is to be given to the words "relating
to" in section 4(2)(a) of the Act. Rather than seeking
that the writ be set aside for want of jurisdiction, TBONE's
efforts may have been better focussed on defending the claims with
its arguments on the merits.
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The Australian High Court was recently given an opportunity to consider the reach of the Damage by Aircraft Act 1999 (Cth) in the cases of ACQ Pty Limited v Cook and Aircare Moree Pty Limited v Cook (both of which were heard together).
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