Transport and Logistics Bulletin (Australia)
In the recent case of Geraldton Port Authority v The Ship "Kim Heng 1888" (No 2) [2012] FCA 353 (Kim Heng 1888), Justice McKerracher of the Federal Court of Australia considered the operation of limitation of actions arising from collisions under the Admiralty Act 1988 (Cth) (Act).
His Honour's decision is an important one, because it provides the first Australian judicial consideration of section 37 of the Act.
The decision also helps to clarify provisions that have been described by learned commentators as 'extremely complex'.
The case arose out of proceedings in rem brought by Geraldton Port Authority (Authority) in respect of the collision of three vessels with berths in the Geraldton Port in 2005. Three conditional appearances were entered in the in rem proceedings in 2010.
The Authority then brought separate in personam proceedings, and applied to Justice McKerracher to discontinue the in rem proceedings.
The defendants argued that the in rem proceeding had been brought outside of the applicable limitation period under section 37(1)(b) of the Act. They also argued that if the in rem proceeding was dismissed as out of time, this would have the effect of also dismissing the in personam proceeding.
Justice McKerracher noted that:
- The Authority's claim for damages was based on section 113 of the Port Authorities Act 1999 (WA) (Port Authorities Act), which gave rise to a statutory claim irrespective of negligence.
- The Port Authorities Act did not provide any limitation periods for the commencement of actions.
He also noted that there was no prima facie abuse of process in the Authority commencing two sets of (almost identical) proceedings. In fact, by virtue of Rule 18 of the Admiralty Rules 1988 (Cth), the Authority could not combine the claims in rem and in personam in one proceeding.
His Honour affirmed the decision of Master Bredmeyer in Sealawn Pty Ltd v Andirina Pearle [2000] WASC 54, in which the court held that an admiralty claim in rem gives the plaintiff security for the sums of money claimed, which is akin to applying for a Mareva injunction. This relief is not available in courts without admiralty jurisdiction, and it is not vexatious to bring separate actions.
Having decided that the Authority's conduct was not vexatious, Justice McKerracher moved on to a detailed consideration of section 37 of the Act. The section sets out that:
Limitation periods
- A proceeding may be brought under this Act
on a maritime claim... at any time before the end
of:
- the limitation period that would have been applicable in relation to the claim if a proceeding on the claim had been brought otherwise than under this Act; or
- if no proceeding on the claim could have been so brought - a period of 3 years after the cause of action arose.
- Subsection (1) does not apply if a limitation period is fixed in relation to the claim by an Act, an Imperial Act, an Act of State or an Act or Ordinance of a Territory, including such an Act or Ordinance in its application in a part of Australia. (Emphasis added.)
The defendants argued that because section 37 uses the word 'claim', and makes a distinction between a 'claim' and 'proceeding', one consistent limitation period must apply to claims submitted to the jurisdiction of the court. In other words, "section 37 prescribes the time limit in respect of claims, not proceedings".
In this case, the defendant's argument would have the effect that both the in rem and in personam proceedings were time barred.
The defendants also argued that the only reason the Authority had sought to discontinue the in rem proceeding was to avoid the operation of the limitation defence.
Justice McKerracher noted that there is no general definition of either a 'claim' or a 'proceeding' under the Act. However, His Honour accepted the parties' submissions that:
- The apparent intention of section 37(1) is that paragraph (a) should apply to in personam proceedings in the Admiralty jurisdiction conferred by the Act; and
- That paragraph (b) should apply to actions in rem.
However, His Honour stopped short of holding that a singular limitation period had to apply to both the in rem and in personam proceedings in the case.
Although the decision of the Full Court in Comandate Marine Corp v Pan Shipping Australia Pty Ltd (2006) 157 FCR 45 suggests that after an unconditional appearance is filed by a named defendant in an in rem proceeding, then the proceeding continues both in rem and also against that person on an in personam basis, His Honour held that:
It does not necessarily follow from this that what would be a six year limitation period for any in personam claim in that proceeding is converted to a three year limitation simply because the proceeding was initially issued in rem only against the ship.
... the inter-changeability of terms such as claim, proceeding and action throughout the Admiralty Act does not permit one to read into the words of section 37 the argument which the defendants now advance.
... The filing of an unconditional appearance does not convert a cause of action or a proceeding in rem to a proceeding in personam, rather, following the filing of the unconditional appearance by 'relevant persons' in an in rem proceeding, the proceeding will continue as against those persons as if the proceeding against them were a proceeding in personam while otherwise continuing in rem.
Finally, His Honour also rejected the defendants' argument that because the Authority had elected for the benefit of the security provided by in rem proceedings, it could not then rescind that election by way of an in personam claim.
Despite His Honour's learned deliberations on section 37, the application of limitation periods in collision claims remains difficult. Working through applicable provisions under the Admiralty Act, state and territory legislation, and international convention where the collision gives rise to cargo damage, will no doubt remain a challenge for legal practitioners. However, at least the decision takes a step into unravelling this mire.
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