Sun Lucky Marine Co Ltd v "Mu Gung Wha" (includes corrigendum dated 9 July 1999) [1999] FCA 919 (9 July 1999)

Last Updated: 20 July 1999

FEDERAL COURT OF AUSTRALIA

Sun Lucky Marine Co Ltd v "Mu Gung Wha" [1999] FCA 919

SUN LUCKY MARINE CO LTD v

THE "MU GUNG WHA" AS SURROGATE FOR THE SHIP "KOREAN PEACE"

WAG 88 of 1998

TAMBERLIN J

9 JULY 1999

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIAN DISTRICT REGISTRY IN ADMIRALTY	WAG 88 OF 1998

BETWEEN:	SUN LUCKY MARINE CO LTD Plaintiff
AND:	THE "MU GUNG WHA" AS SURROGATE FOR THE SHIP "KOREAN PEACE' Defendant

JUDGE:	TAMBERLIN J
DATE:	9 JULY 1999
PLACE:	SYDNEY

CORRIGENDUM

In the reasons for judgment delivered by Justice Tamberlin on 9 July the following amendments are made:

1. In the Orders of the Court, Order 3, "Korea Line Corporation" is replaced with "Korean Line Corporation".

2. On page 2 of the Reasons for Judgment, par 7, "Korea Line Corporation" is replaced with "Korean Line Corporation".

I certify that this is a true copy

of the Corrigendum made to the

reasons for judgment in this matter

of the Honourable Justice Tamberlin.

Associate:

Date: 15 July 1999

FEDERAL COURT OF AUSTRALIA

Sun Lucky Marine Co Ltd v "Mu Gung Wha" [1999] FCA 919

SUN LUCKY MARINE CO LTD v

THE "MU GUNG WHA" AS SURROGATE FOR THE SHIP "KOREAN PEACE"

WAG 88 of 1998

TAMBERLIN J

9 JULY 1999

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIAN DISTRICT REGISTRY	WAG 88 OF 1998
IN ADMIRALTY

BETWEEN:	SUN LUCKY MARINE CO LTD Plaintiff
AND:	THE "MU GUNG WHA" AS SURROGATE FOR THE SHIP "KOREAN PEACE" Defendant
JUDGE:	TAMBERLIN J
DATE OF ORDER:	9 JULY 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The proceedings herein be stayed until further order.

2. The application for costs of the stay application be dismissed.

3. The security ordered and paid into Court on 21 July 1998 be retained by the Court as security for the satisfaction of any order, award or judgment that may be made in these proceedings, the Arbitration between Sun Lucky Marine Co Ltd and Korea Line Corporation in London, or any subsequent appeal arising therefrom.

4. The defendant is entitled to be provided with security for its costs in this action to the extent of $6,000, which sum it is entitled to set-off against any costs agreed or taxed by the plaintiff, unless the plaintiff is successful in the Arbitration in London, after all appeals therefrom have been heard and determined.

5. The costs of the plaintiff's Notice of Motion dated 25 September 1998 for a stay of these proceedings be costs in the cause.

6. Liberty to the parties to apply on 2 days notice.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAG 88 OF 1998
IN ADMIRALTY

BETWEEN:	SUN LUCKY MARINE CO LTD Plaintiff
AND:	THE "MU GUNG WHA" AS SURROGATE FOR THE SHIP "KOREAN PEACE" Defendant

JUDGE:	TAMBERLIN J
DATE:	9 JULY 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 There are two applications before me. The plaintiff seeks a stay of the proceedings pending in this Court until the handing down of a decision in the London arbitration, which I am informed has been heard with the decision reserved. This application is not opposed subject to the provision of security for costs by the plaintiff. The second application is an application by the defendant for security for costs in the amount of $10,000 to $15,000. The question of costs for both applications are in issue.

2 The defendant's concern is that if the plaintiff is unsuccessful in the London arbitration, the defendant will be unable to recover any future costs and some costs presently said to have been incurred. The defendant's estimate of $10,000 to $15,000 is said to be made on the assumption that should there be a favourable award by the arbitrators, any application to have judgment entered in favour of the defendant and payment made out of the funds paid into the Court previously will be opposed. In an affidavit of 24 April 1999, filed on behalf of the plaintiff, opposing the award of any security, it is pointed out that it is only an assumption that any application to have judgement in favour of the defendant will be opposed. In the event that such an application was opposed then, it is suggested, a figure of $5,000 in respect of costs would be more appropriate than the amount claimed.

3 Under s 29(3) of the Admiralty Act 1988 (Cth), where a court stays proceedings it may impose such conditions as it thinks fit. In my view, this power is sufficiently broad to empower the court to impose a condition as to costs.

4 I can see some force in the defendant's case that it may be left without recourse in the event that the plaintiff succeeds in the arbitration in circumstances where the Australian proceeding has been stayed. I am satisfied, however, that some costs which the defendant has incurred or will incur may be recoverable in the event that the plaintiff fails in the arbitration. In these circumstances, I think that some security ought be provided. The appropriate figure ranges on the evidence between $2,000 and $15,000. The determination of security in these circumstances is not one which lends itself to precision. However, having regard to the material presently before me, I consider that a figure in the order of $6,000 is appropriate.

5 I note that the Notice of Motion filed on 25 March 1999 by the defendant sought security in the order of US $270,000 by way of bank guarantee, or alternatively A$25,000. There have been subsequent negotiations between the parties but they have been unable to agree on the amount of residual security which is now sought. In these circumstances and in view of the reduction in the amount of security claimed, I do not think that it is appropriate to make any orders to costs in relation to the application for security.

6 With respect to the stay application and the costs of that application, I am satisfied the proceedings should be stayed and I think the appropriate order is that the costs of the plaintiff's motion of 25 September 1998 for a stay of proceedings should be costs in the cause.

7 Accordingly, the orders I make are as follows:

1. The proceedings herein be stayed until further order.

2. The application for costs of the stay application be dismissed.

3. The security ordered and paid into Court on 21 July 1998 be retained by the Court as security for the satisfaction of any order, award or judgment that may be made in these proceedings, the Arbitration between Sun Lucky Marine Co Ltd and Korea Line Corporation in London, or any subsequent appeal arising therefrom.

4. The defendant is entitled to be provided with security for its costs in this action to the extent of $6,000, which sum it is entitled to set-off against any costs agreed or taxed by the plaintiff, unless the plaintiff is successful in the Arbitration in London, after all appeals therefrom have been heard and determined.

5. The costs of the plaintiff's Notice of Motion dated 25 September 1998 for a stay of these proceedings be costs in the cause.

6. Liberty to the parties to apply on 2 days notice.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated: 9 July 1999

Solicitor for the Applicant:	Jackson McDonald
Solicitor appearing for the Applicant:	D Carter
Solicitor for the Respondent:	Stuart Hetherington Solicitors
Solicitor appearing for the Respondent:	S Hetherington
Date of Hearing:	25 May 1999
Date of Judgment:	9 July 1999