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Federal Court of Australia |
Last Updated: 13 March 2006
FEDERAL COURT OF AUSTRALIA
New Guinea Line Pty Limited v Board of Trustees of Papua New Guinea National Museum & Art Gallery [2006] FCA 171
PRACTICE AND PROCEDURE – interpleader suit – Order
44 Rules 2 – ocean carrier of cargo interpleads after threat of suit by
someone claiming
to be the owner of cargo – no letter of indemnity
proffered by consignee and bill of lading
holder.
NEW
GUINEA LINE PTY LIMITED AND ANOR v THE BOARD OF TRUSTEES OF PAPUA NEW GUINEA
NATIONAL MUSEUM & ART GALLERY & ORS
NSD 1048 of
2005
ALLSOP J
10 MARCH 2006
SYDNEY
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NEW GUINEA LINE PTY LIMITED
FIRST APPLICANT THE CHINA NAVIGATION COMPANY LIMITED T/A CHIEF CONTAINER SERVICE SECOND APPLICANT |
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AND:
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THE BOARD OF TRUSTEES OF PAPUA NEW GUINEA NATIONAL MUSEUM & ART
GALLERY
FIRST RESPONDENT SOROI EOE - DIRECTOR OF PAPUA NEW GUINEA NATIONAL MUSEUM & ART GALLERY SECOND RESPONDENT 75TH SQUADRON FLYING MUSEUM THIRD RESPONDENT BRUNO CARNOVALE - DIRECTOR 75TH SQUADRON FLYING MUSEUM FOURTH RESPONDENT |
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DATE OF ORDER:
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WHERE MADE:
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THE COURT ORDERS THAT:
Note: Settlement and entry of orders is dealt with in Order 36 of the
Federal Court Rules.
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AND:
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REASONS FOR JUDGMENT
1 Before the Court is a notice of motion filed on 20 October 2005. In it the third and fourth respondents seek to have struck out the application, by way of interpleader pursuant to Order 44 r 2 of the Federal Court Rules, filed in Court by the applicants on 24 June 2005.
2 The application seeks the following orders:
1. An order that the Applicant hold the goods, being the whole of the property carried pursuant to bill of lading number CPGLAE-0004067 dated 1 June 2005 in containers numbered CRXU9804559 and TRLU2613570 described as "Aircraft Parts (War Relics)" and claimed by each of the Respondents ("the property") until such time as determination of all matters in dispute between the Respondents in respect of the said property.
2. Alternatively to Order 1, that the Applicant hand over the property to the Admiralty Marshal or other Officer of the Court.
3. No action be brought by the Respondents at any time against the Applicant or its agents (Steamships Shipping Ltd t/a Steamships Shipping Agents in Papua New Guinea, and Swire Shipping Agencies Pty Ltd in Australia in respect of the said property.
4. That the reasonable charges incurred by the Applicant in storing the property be paid by one or other of the Respondents of both of them.
5. Such orders or directions as the Court thinks fit for the determination of all matters in dispute between the Respondents in respect of the said property.
3 The affidavit evidence before me in support of the motion consisted of four affidavits of Michael Andrew Scott, to which no objections were taken, sworn respectively 19 October 2005, 28 October 2005, 9 November 2005 and 16 November 2005.
4 The substantive applicant, respondent on the notice of motion (henceforth the "applicant") relied upon an affidavit of Geoffrey Eric Farnsworth of 24 June 2005, and an affidavit of Jenny Bazakas sworn 24 June 2005 and filed in court on 29 June 2005, and two further supplementary affidavits of Geoffrey Eric Farnsworth sworn respectively on 27 October 2005 and 15 November 2005. No objection was taken to any of these affidavits.
5 The applicants also tendered in court over the objection of the third and fourth respondents a copy of a letter ("Exhibit A") purporting to be from the Prime Minister of Papua New Guinea addressed to the Attorney-General of that country. I gave leave to the third and fourth respondents to make submissions about the authenticity of that letter and to make submissions about matters directly arising from the tender of that letter and to file any further affidavit evidence within seven days of the hearing. No submissions of either character have been made, though two affidavits of Michael Andrew Scott of 28 November 2005 and 5 December 2005 were filed. I will come to them later. These affidavits do not in any event cast doubt upon the authenticity of the letter. I therefore proceed on the basis that the authenticity of that letter is not in question.
6 On the basis of the evidence thus before me, it is said by the applicants on the motion (henceforth the ‘third and fourth respondents’) that the interpleader should be struck out because there is no longer, if there ever was, a basis for an expectation that the party interpleading would be sued by the first and second respondents.
7 Order 44 r 2 of the Federal Court Rules provides:
Where:
(a) a person is under a liability (otherwise than as a Sheriff) in respect of a debt or other personal property; and
(b) the person is sued, or expects to be sued, in the Court, for or in respect of the debt or property by two or more persons making adverse claims to the debt or property;
the Court may grant relief by way of interpleader.
8 It is common ground that the interpleader proceeding requires for its continuation a real foundation for an expectation in the interpleading party that it would be sued.
9 The applicant submits that the evidence shows that there was and remains the continuing possibility of suit against it concerning the discharge of the property at the heart of this dispute.
10 The pieces of property at the heart of this dispute are two containers of war relics, being parts of aircraft from the Second World War. By bill of lading dated 1 June 2005, issued in Lae, Papua New Guinea, the two containers were shipped on board MV "Aotearoa Chief" a vessel sailing under a line called the Chief Container Service operated by the applicants, destined for discharge at the Port of Melbourne. The consignee named on the bill of lading is the 75th Squadron Flying Museum, of Richmond in Melbourne.
11 The containers have never been delivered to the consignee on the bill and are presently in storage at or near the Port of Melbourne, pursuant to orders of this Court first made on 24 June 2005. The reason for that measure was the apprehension of a dispute between the 75th Squadron Flying Museum (the third respondent), and the Director and Board of Trustees of the Papua New Guinea National Museum and Art Gallery ("NMAG"), (the first and second respondents), as to ownership of the cargo and entitlement to ship it out of Papua New Guinea. It was also because of this perceived ownership dispute that the applicants brought the interpleader application in the first place. The applicants appear to have been in genuine doubt as to whether it would be liable in respect of conversion if they delivered the cargo to the named consignee.
12 In order for me to ascertain whether the interpleader should now be struck out, it is necessary to identify the background to the dispute and its resolution or lack thereof.
13 From the evidence before me the dispute seems to have has its origins prior to the shipping of the containers on 1 June 2005. Some of that history is set out in the affidavit of Simon Poraituk dated 23 August 2005 annexed to the affidavit of Mr Scott sworn 28 October 2005 and also in the affidavit of Mr Farnsworth of 24 June 2005. I do not think it is necessary for present purposes to delve deeply into that history. It is sufficient to note that, prior to the shipping of the containers, there had been some dispute between the NMAG and the third and fourth respondents as to whether the third and fourth respondents owned the war relics and were entitled to export them to Melbourne. This dispute appeared to have been resolved on the basis that an existing Memorandum of Agreement between Papua New Guinea and the 75th Squadron Flying Museum gave the latter party the right to export the war relics. An export permit appeared to have been issued and it was on that basis that the containers seem to have been shipped to Melbourne on 1 June 2005 from the Port of Lae.
14 Thereafter, on 14 June 2005, the National Court at Waigani in Papua New Guinea made orders including orders in the following terms.
1. The Defendants return the two (2) Containers containing all and every item of War Surplus Materials to Papua New Guinea forthwith.
2. That the Third Defendant appear before the Court to explain their actions for exporting the Containers while Court proceedings on the substantive Issues in OS No 88 and 612 of 2004 between Plaintiffs and now Defendants against National Museum and the State are still pending at Lae.
3. That Second Defendants Lawyers explain to Court why their clients exported the Containers while proceedings referred to in item 2 are still in place.
4. That Third Defendant return at his own costs the said Containers to Lae until further Orders.
5. This matter by transferred to Lae National Court.
15 The named defendants on the heading of the orders were Steamships Ltd, 75th Squadron Flying Museum, and Bruno Carnovale. It would seem that those orders were made in proceedings commenced by Narakobi Lawyers a firm of solicitors in Papua New Guinea, apparently representing the Director and Board of Trustees of the NMAG as well as the Independent State of Papua New Guinea.
16 Copies of these orders were sent to the legal representatives of the applicants, Norton White, on 15 June 2005, by Narokobi Lawyers. The applicants initially took the view that the orders should not be taken as binding upon them, as shown by a letter of 22 June 2005 from Norton White. On 23 June 2005 Narokobi Lawyers wrote to Mr Farnsworth of Norton White stating that the Court orders of 14 June 2005 were to bind all parties including the applicants, and that they should return the containers to PNG. That letter goes on to state that "in the event that the containers are delivered that letter serves as notice that the client may be sued for damages [by the State of PNG]".
17 The interpleader proceedings were commenced by the applicants in this Court on the next day, 24 June 2005. It would appear from a file note of Ms Bazakas of Norton White, annexed to her affidavit of 29 June 2005, that she had a telephone conversation with Camillus Narakobi of Narakobi Lawyers on 27 June 2005, and that at least as of that date, Narakobi Lawyers were informed of the orders made in this Court on 24 June 2005.
18 I note, for reasons that will become apparent, that a document dated 9 August 2005 records the Attorney-General of Papua New Guinea instructing Narokobi Lawyers to act for the Board of Trustees, the Director, and the State. From the context it would appear that this relates to the court case being fought in the National Court of Papua New Guinea between these parties and the 75th Flying Squadron, in which the orders set out above were obtained. The document appears to be signed by one Fred Tomo, acting Attorney-General.
19 Judgment was delivered in the National Court case being fought in Papua New Guinea by Manuhu J on 30 September 2005 in favour of the third and fourth respondents’ right to export the war relics. It appears that contempt proceedings against those parties who were responsible for the shipment of the containers to Australia were also dismissed by Manuhu J. The parties included the Director, the Board of Trustees and the State, being the first, second and third consolidated plaintiffs (Mr Narakobi appearing for the first and third plaintiffs), CCS and China Navigation, being the the fifth- and sixth-named defendants, who are also the applicants in the Federal Court. It would seem that these defendants were two of the alleged contemnors.
20 A letter of 10 October 2005 from Mr Tomo to Narokobi lawyers contains instructions to continue to represent Board, Director and State; including drafting a notice of appeal. These instructions appear to relate to an appeal against the decision of the national court handed down on 30 September 2005. It appears from further correspondence that the notice of appeal was filed on 13 October 2005.
21 On 12 October 2005 Dwyer & Co, the legal representatives of the third and fourth respondents in Melbourne, sent a facsimile to Norton White advising of the national court decision, asking that the interpleader application ‘desist’ and the matter be resolved by releasing the war relics to them.
22 On 18 October 2005 the PNG Minister of Culture and Tourism, Mr David Basua MP, wrote to the State Solicitor of PNG seeking that steps be taken to restrain Narokobi Lawyers from acting for the State and Board of Trustees of the NMAG. This action would appear to have cast doubt upon the validity or likelihood of the propagation of the appeal. It would also appear to have cast doubt upon the existence of an intention, held by the State of PNG acting through proper officers, to claim ownership of the property. It appears to be contradictory to the instructions of 9 August 2005 from the Attorney-General.
23 On 21 October 2005, seemingly in response to the fax of 21 October, Norton White sent a facsimile to Dwyer & Co and to S Moran & Co (representing the first and second respondents) indicating their preparedness to agree to orders on the next court occasion to release the containers to the third and fourth respondents subject to payments for costs of storage. The facsimile also sought advice as to whether S Moran & Co’s clients intended to appeal the National Court decision.
24 Also on 21 October 2005, and seemingly in reply to this correspondence S Moran & Co wrote to Norton White and Dwyer & Co to advise that an appeal was filed on 13 October 2005 and a stay on the National Court decision was obtained in the Supreme Court of Justice. I note the observation in that facsimile that the appeal was likely to be heard in December 2005 or early 2006. Part of that letter reads:
"If on the other hand your client [the third respondent] does not intend to abide by the decision of the appellate court in PNG, and wishes to have the war planes delivered to it, then the position of our clients (which now also includes the State of Papua New Guinea) is to oppose that course. This will involve the bringing of an application for interim relief for the preservation of the property, those orders necessarily being sough against the present Applicants in the Federal Court proceedings as well as the Third and Fourth Respondents. The substantive basis for our clients’ claim is, inter alia, for conversion of property. It is abundantly evident, and it has always been so, that adverse claims to the property are maintained by our clients as well as the Third and Fourth Respondents. The relief by way of interpleader sought by the Applicants in the Federal Court proceedings has, in our view, always been an appropriate course for the Applicants to take. Nothing has changed by reason of the delivery of the first instance decision in PNG. The same adverse claims to the property remain as before.
The interpleader process having commenced, and which remains appropriate, the dispute between the parties should be determined within those proceedings. It is premature for those proceedings to be brought to an end, given the continuation of the dispute. Similarly, it is premature to make costs orders given that the dispute remains on foot.
Accordingly, if the Third and Fourth respondents are taking the position that they are not prepared to abide by the decision of the appellate court in PNG and wish for the goods to be delivered to them now, then the appropriate course is for the interpleader proceedings to remain on foot and for directions to be made for the bringing of claims by the Respondents in that proceeding. If, on the other hand the Third and Fourth Respondents are willing to abide by the appellate court decision, then the appropriate way forward is for the continuation of the current regime."
[Emphasis added]
25 On 21 October 2005 the Papua New Guinea Minister of Culture and Tourism wrote to Simon Poraituk, the newly appointed director of the NMAG, advising him to dishonour any directions or government business conducted or engaged by the former acting director Mr Soroi Eoe. As with the letter of 18 October 2005, this would appear to have cast doubt upon the validity or likelihood of propagation of the appeal. As before, it would further appear to cast further doubt upon whether the State of PNG acting through proper officers, intended to claim ownership of the property.
26 In the same vein, on 25 October 2005 the Minister of Culture and Tourism wrote to the Acting State Solicitor with instructions to withdraw the appeal in the Supreme Court. The letter indicates the view that Narakobi lawyers were thus far acting without instructions.
27 Further, and also on 25 October 2005, the Minister of Culture and Tourism wrote to Narokobi Lawyers saying that the litigation in PNG had been without duly obtained instructions from the State, that the State has incurred costs in addition to Narokobi’s fees and that it is not prepared to commit to any further costs. The letter questions the authority of the acting Attorney-General to instruct Narokobi Lawyers. It also threatens referral of Narakobi Lawyers to the Law Society.
28 On 28 October 2005 Simon Poraituk, the Acting Director of the NMAG, wrote to the State Solicitor of PNG stating that the Board of Trustees no longer existed; that Mr Soroi Eoe no longer held public office; "that the State was never properly represented when Ministerial directives based on the State Solicitor’s advice to resolve the matter administratively was intentionally defied", that "this is really a dead issue as neither I nor the Minister as the only appropriate State representatives has authorised this court appeal." The letter was also sent to the Minister of Culture and Tourism.
29 On 31 October 2005 Dwyer & Co wrote to S Moran & Co part of which correspondence is reproduced as follows:
"With regard to the threat of legal proceedings for conversion, we note that the First and Second Respondents do not have standing to issue proceedings in the Federal Court of Australia because:
1. Mr Eoe is no longer an employee of the National Museum and Art Gallery of Papua New Guinea ("PNG Museum")
2. There are currently no appointed Trustees of the PNG Museum."
We will apply to have any such proceedings immediately struck out.
We invite S Moran & Co to indicate, prior to the hearing of the motion, the individuals at the PNG Museum who are providing them with instructions.
30 On 8 November 2005 letter Simon Poraituk wrote directly to S Moran & Co solicitors instructing them to immediately discontinue proceedings in Sydney and to refrain from further representing the NMAG and board of trustees. The letter was carbon copied to the PNG Minister for Culture and Tourism and to Dwyer & Co.
31 On 11 November 2005 S Moran & Co wrote to Norton White. That letter states that instructions come from Narokobi Lawyers, instructing them on behalf of the Independent State and the Board of Trustees, and further states that Narokobi lawyers are instructed by the Attorney-General of PNG.
32 On 18 November 2005 Prime Minister of PNG appears to have written to the Attorney-General of PNG. That letter was tendered as Exhibit A on the motion, and as I have said, no issue was raised about the authenticity of the letter. It contains a written authority, from the Prime Minister, to instruct lawyers in the appeal in PNG. Further, part of that letter reads:
"It should be made very clear to parties and Court officials in NSW that the State continues to regard the two (2) Containers of War relics subject of proceeding there as its absolute property until the Appeal in PNG is determined. National Court Orders for the Containers to be returned remain valid and they must be returned to Papua New Guinea pending Supreme Court Decision.
Please note that the State through Department of Foreign Affairs has requested Australian Government through Australian High Commission in a Diplomatic Note in June 2005 to assist in returning the two (2) said Containers of war aeroplane parts and that this stand remains. Owing to circumstances surrounding these proceedings that from now on, your only Policy Direction on the matters is to come from the NEC, Prime Minister or Deputy Prime Minister and no-one else, and that you continue to discharge your professional duties pursuant to Attorney Generals Act and other related laws."
33 After the hearing of the motion, a third further supplementary affidavit of Mr Scott was filed annexing letter from Warner Shand received by his firm on 23 November 2005. That letter is dated 23 November 2005 and appears to indicate that a submission apparently will be made by the Minister for Culture and Tourism to the Prime Minister, possibly for the purpose of changing the instructions manifest in the letter of 18 November.
34 Again, on 5 December 2005 Mr Carnovale states through his solicitor by affidavit that the Minister for Culture and Tourism of PNG cannot provide a submission to the Prime Minister of PNG before 6 December.
35 There is further detail about the history of events which could be referred to. It is unnecessary to do so because the above is adequate to demonstrate the confused body of assertion which make up the events. This recitation of the developments in this matter from 14 June 2005 onwards shows that there is considerable doubt and dispute concerning the entitlement of Narokobi Lawyers to act on behalf of the State of PNG, whether there is in truth a claim made to the property by the State through persons authorised to make that claim, and indeed whether the Board of Trustees exists at all. It is clear enough that none of these questions, which would require detailed forensic examination for their resolution, changes the clear indication that whatever their answers might be, the applicants nevertheless face the prospect of a claim against it by somebody appearing to act on behalf of the State of PNG. Whatever perceived doubts there may be, they do not appear to demonstrate any hesitation to litigate. I say this without criticism of any party or legal representatives. It goes without saying that S Moran & Co can be assumed to have acted in this proceeding on the basis of a genuine belief in the validity of their instructions. To accede to this notice of motion would be, I think, to conclude that S Moran & Co’s instructions are invalid or non-existent, or that the interests represented by S Moran & Co would assert no further claim to the property. On the basis of the evidence before me I am unable to come to either conclusion.
36 In my opinion it is clear from the letter of 21 October from S Moran & Co that those appearing to act on behalf of the State have relinquished no claim on the containers, and that the applicants would reasonably apprehend having to fight claims in the Federal Court within the interpleader proceeding. It goes without saying that if that proceeding were to cease, the applicants would reasonably apprehend having to answer proceedings (quite possibly in the Federal Court) seeking injunctions against the delivery of the property, or alternatively, answer a suit for conversion of property. In my opinion O 44 r 2 requires the expectation of a suit that could be brought in the Federal Court. It does not require an expectation that the suit will be brought specifically in the Federal Court and not in some other court of competent jurisdiction.
37 At no time have the third and fourth respondents or anyone offered the applicants any letter of indemnity, secured or unsecured. This is the usual commercial mechanism employed to receive discharged cargo in a way which will protect the independent carrier. For whatever reason it has not been employed, leaving the carrier with no choice other than the protection of the Court or risking suit against it.
38 In the above circumstances I am satisfied on the evidence that the applicants had at the time of the institution of proceedings, and still have, a reasonable expectation of being sued for conversion of property if they deliver the containers to the third and fourth respondents. Such an action would be in federal jurisdiction as a claim falling within s 4(3) of the Admiralty Act 1988 (Cth). It follows that the notice of motion must be dismissed.
39 The second matter to be dealt with is that of the proposed amended application attempted to be filed in court, joining the Independent State of Papua New Guinea to the proceedings. The letter of Dwyer & Co "that the first and second respondents do not have standing to issues proceedings in the Federal Court of Australia". As I have said, S Moran & Co would seem to hold a contrary view. Nevertheless, it is clear that the State of Papua New Guinea is an interested party, if not the ultimate controlling authority for the giving of instructions to the first and second respondents. It is the entity that claims ownership of the property under its laws.
40 Yesterday the solicitor for the third and fourth respondents irregularly and without leave sent by facsimile two affidavits with a request that they be read. This is an extraordinary step not being by consent or otherwise the subject of leave or warning. However, I will hear the parties on it after I have made the orders. I also wish to hear the parties as to whether the Independent State of Papua New Guinea should be joined in an Australian court in a claim such as this and whether it is still necessary.
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I certify that the preceding forty (40) numbered paragraphs are a true copy
of the Reasons for Judgment herein of the Honourable Justice
Allsop.
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Associate:
Dated: 10 March 2006
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Counsel for the Applicant:
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M McHugh
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Solicitor for the Applicant:
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Norton White
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Counsel for the 1 & 2 Respondents:
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J Lockhart
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Solicitor for the 1 & 2 Respondents:
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S Moran & Co
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Counsel for 3 & 4 Respondents:
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H Halligan
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Solicitor for the 3 & 4 Respondents:
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Dwyer & Co
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Date of Hearing:
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21 November 2005
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Date of Judgment:
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10 March 2006
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/171.html