ARTICLE
17 March 2024

Answering the perennial question – When is a ship not a ship?

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Holding Redlich

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Holding Redlich, a national commercial law firm with offices in Melbourne, Canberra, Sydney, Brisbane, and Cairns, delivers tailored solutions with expert legal thinking and industry knowledge, prioritizing client partnerships.
Useful guideposts in determining whether a floating fish farm could be considered a ship in Australian waters.
Australia Transport
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In the case of Vallianz Shipbuilding & Engineering Pte Ltd v Owner of the vessel "ECO SPARK" [2023] SGHC 353 (The Eco Spark) and in what Mohan J said was, surprisingly, "the first time this question is squarely before our courts", the High Court of Singapore had to determine whether a floating fish farm could be considered a 'ship' for the purposes of invoking the courts admiralty jurisdiction. The proceedings in The Eco Spark were brought to set aside the warrant of arrest issued against the vessel 'ECO SPARK', the logic being that only a 'ship' can be amenable to maritime jurisdiction.

In this article we take a look at The Eco Spark and ask whether there are any lessons for Australian practitioners?

What happened?

The Eco Spark was initially a steel dumb barge and was subsequently converted into a floating fish farm. Several of its characteristics are worth noting, as they make the finding that the Eco Spark was a ship ever more interesting:

  • it was, at the time of the proceedings, spudded to the seabed, though it was not always so
  • it had no engines and was not capable of self-propulsion
  • it was not manned by a master or any seafaring crew
  • it did not have any navigational equipment onboard or any conventional navigational lights
  • it did not transport any persons, cargo or objects from one place to another.

Section 2 of the High Court (Admiralty Jurisdiction) Act 1961 defines ship as "includ[ing] any description of vessel used in navigation". Section 2 of the Interpretation Act 1965 defines vessel as including "floating craft of every description". It was common ground between the parties that the Eco Spark was a vessel, the dispositive issue therefore being whether it was a ship.

Findings of the court

Mohan J considered cases from across the common law world and concluded several important points:

  • when considering the meaning of what will constitute a ship, courts should "give a broad and liberal construction to the statutory provisions conferring admiralty jurisdiction"
  • no one characteristic will be determinative – courts have often disagreed as to the importance to be placed on certain factors. As such, the inquiry of whether a vessel is a "ship" is necessarily multi-factorial, though the more of these characteristics a vessel possesses, the more likely it is a ship
  • Importantly however, Mohan J noted that "the failure to tick some of these boxes does not necessarily mean that the vessel cannot constitute a "ship""
  • Mohan J established as an "irreducible minimum", the "capability of the vessel to be used in navigation as a matter of its physical design and construction, ie, whether it is navigable and built to withstand the perils of the sea, irrespective of its actual current use"
  • the importance placed on this element of navigability as an irreducible minimum derives from the purpose of arrest: "Among others, the navigability of a vessel is what gives rise to the risk and danger of it having the ability to be removed from a jurisdiction, thereby defeating legitimate in rem claims".

To Mohan J, five factors were worthy of consideration:

1. the physical characteristics of the vessel; Mohan J including in this list "the ability to self-propel, being possessed of a keel or a steering mechanism such as a rudder, having a crew to man the ship, navigation lights, and ballast tanks". Importantly, an absence of such things is not determinative of the vessel's characterisation

2. the vessels design and capability; this involves an assessment of the vessels navigability, which the High Court concluded meant the design and capability of a structure to move from one place to another.

3. actual current use and frequency of use. The High Court's findings on this point are particularly poignant; Mohan J departed from authority in other jurisdictions by concluding that:

"the infrequency, or even complete absence of, actual navigation... does not and cannot change the fact that the vessel can, in actual fact, be navigated across the water... That element of navigability, in my view, would be sufficient to attract and justify the proper invocation of the court's admiralty jurisdiction against the vessel concerned".

4. classification and certification of a vessel as a ship by, for example, a regulatory authority, is an important indicia in the assessment of whether a vessel is a ship.

5. registration and flag – the High Court concluded that whilst these criteria are not determinative, they would be relevant to the question of whether or not a vessel is a ship.

Mohan J ultimately concluded that the Eco Spark was a ship and therefore amenable to arrest, being persuaded "by the claimant's argument and evidence that... [the] spuds are removable and retractable such that the Vessel is not permanently stationary".

How is a 'ship' defined in Australia?

Under section 3 of the Admiralty Act 1988 (Cth) (Admiralty Act), a 'ship' is "a vessel of any kind used or constructed for use in navigation by water, however it is propelled or moved, and includes:

  • a barge, lighter or other floating vessel...".

In The Eco Spark, Mohan J considered the Federal Court's decision in Guardian Offshore, which considered whether a remotely operated vehicle could be considered a ship for the purposes of the Admiralty Act. Of particular note to Mohan J was the Federal Court's findings that:

  • "[a]lthough the ROV was technically capable of navigation, its ability to do so was "relatively confined"
  • "the ROV "[did] not have a capacity to float or withstand the perils of the sea whilst being towed"; the ROV could not be described as "seaworthy" in any relevant sense"
  • the ROV was "not registered as a ship".

Fish farms in Australian waters

Whether a fish farm could be classified as a 'ship' would depend entirely on its construction. Important to Mohan J in concluding that the Eco Spark could be considered a ship was the "past use of the vessel" which "in her past life as the barge "WINBUILD 73"... undoubtably fell within the definition of a 'ship'. It was also an important fact that the Eco Spark had previously been used in navigation, including during its voyage from Indonesia to Singapore.

It has traditionally been the case that a fish farm's construction consisted of large nets, suspended by several floating plastic rings, that need to be towed into position and anchored to the seafloor. It would seem that such structures, being fairly said to be incapable of navigation, fall comfortably outside the ambit of what should be considered a 'ship' for the purposes of invoking admiralty jurisdiction.

The advent of new technologies and approaches to open water fish farming, such as Norway's planned implementation of the 'Havfarm', featuring ship-like system and operation capabilities, including motor propulsion and a dynamic positioning system, will in the future challenge these definitional boundaries.

Houseboats

The Admiralty Act hints at the inclusion of vessels such as houseboats under its auspices, and thus subject to admiralty jurisdiction, by its express inclusion of the category "barge... or other floating vessel" in its definition of ship. Such language, on an ordinary reading, appears broad enough to capture vessels such as houseboats.

Through the lens of the Singaporean High Court, one would most likely reach the same conclusion. Therefore, a houseboat would ordinarily meet Mohan J's 'irreducible minimum' of the "capability of the vessel to be used in navigation as a matter of its physical design and construction". On the other hand, it might well be said, depending on the physical characteristics of any particular houseboat, that, in the words of the Federal Court in Guardian Offshore, it may "not have a capacity to float or withstand the perils of the sea", its ability to navigate thus being "relatively confined". It would vary case to case.

Takeaway

While we may be no closer to answering the perennial question after The Eco Spark, the case reminds us of essential principles which are useful guideposts in long-lived the interpretive task of determining when a ship is really a ship.

If you have any questions, please get in touch with a member of our team below.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

ARTICLE
17 March 2024

Answering the perennial question – When is a ship not a ship?

Australia Transport

Contributor

Holding Redlich, a national commercial law firm with offices in Melbourne, Canberra, Sydney, Brisbane, and Cairns, delivers tailored solutions with expert legal thinking and industry knowledge, prioritizing client partnerships.
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