Lady Carrington Steamship Co Ltd v Commonwealth [1921] HCA 49; (1921) 29 CLR 596 (18 November 1921)

HIGH COURT OF AUSTRALIA

The Lady Carrington Steamship Company Limited Plaintiff; against The Commonwealth Defendant.

H C of A

18 November 1921

Knox C.J., Higgins and Starke JJ.

Brissenden K.C. (with him H. E. Manning), for the defendant.

Broomfield K.C. (with him Milner Stephen), for the plaintiff.

Brissenden K.C., in reply.

Knox C.J.

This reference to us raises a number of questions which I think it is neither necessary nor expedient to decide on this application. The first question raised is as to the constitutionality of certain of the War Precautions (Shipping) Regulations. That question should not be decided by a Court consisting of three Justices. The next question is whether the New South Wales Arbitration Act 1902 applies so as to enable a stay of proceedings to be granted in an action instituted in the High Court which the High Court is competent to entertain. That may be a point of some difficulty, but it is one on which it is unnecessary to express an opinion at present. Another point raised is whether a notional agreement such as Mr. Brissenden suggests there is in this case—an agreement constituted by the taking of the ship under the War Precautions (Shipping) Regulations and the communication to the plaintiff of the terms of the charter—amounts to "a written agreement" in the definition of in sec. 3 of the Arbitration Act 1902. That question it is unnecessary to decide, because in the view I take, even assuming that all those points were decided in favour of the Commonwealth, there still remains a point on which this application ought to be refused, and that is, that there is sufficient reason why the matter should not be referred to arbitration in accordance with the alleged submission. It seems to me that the litigation of the matters raised by the statement of claim, and presumably to be put in issue by the Commonwealth, will involve almost necessarily the determination of the constitutional point, and will necessarily involve the determination of more than one point of law, and the effect of staying proceedings in this action would be that all those points would eventually have to come by a more or less roundabout method to the High Court through the arbitrators and the Supreme Court, whereas if the action be allowed to go on they will be decided in the ordinary course by the Justice of this Court who hears the action, or on a reference by him, or on appeal from him, by the Full Court. I therefore think that this is not a proper case for a stay of proceedings to be granted, even assuming that the Court has power to grant a stay in accordance with the provisions of the Arbitration Act.

Higgins J.

I agree in the opinion that the proceedings should not be stayed as a matter of discretion, as stated by the Chief Justice. It is to be understood that we reserve our opinion as to the questions of powers, as to the applicability of the Arbitration Act of New South Wales, and as to the meaning of the word "submission."

I would like to add a few words, as the summons came before me originally. My difficulties, as expressed in Chambers, were due to the fact that the plaintiff appeared to be blowing hot and cold—to be approbating the charter-party and reprobating some of its terms. But I find on examination of the statement of claim that it is not based on the charter-party. The charter-party is not once referred to in the statement of claim. It is a claim for reasonable payment for the use of a ship, some of the claims being of a nature included in the charter-party and some not. Of course, in an action for reasonable payment the charter-party would naturally be evidence, but to say that it is an action on the charter-party is, in my opinion, a mistake.

I should like to add also that I feel some doubt as to the applicability of sec. 79 of the Judiciary Act to the High Court at all. I doubt whether the procedure of the High Court as to trials is not governed by the High Court Procedure Act.

Starke J.

I agree that this application should be refused. It is made under sec. 6 of the Arbitration Act of New South Wales, which confers a power which, it is said, can be exercised by this Court by virtue of sec. 79 of the Judiciary Act. It is unnecessary to determine in the present case whether sec. 79 enables this Court to exercise the power contained in sec. 6. But if it does, then the very difficult question arises, as to which the facts are not sufficiently before us to enable us to determine it, namely, whether there is a "submission" in this particular case within the meaning of the Arbitration Act. Assuming all these matters in favour of the applicant, there still remains a serious and difficult question of law involved in the action which, in my opinion, is not proper to be submitted to arbitration. That question is whether the War Precautions (Shipping) Regulations so far as they fix a standard rate of charter for ships requisitioned under those Regulations are within the competence of the Federal Parliament. The arbitrator would have to determine that question before he could award any compensation for the taking of the plaintiff's ship. Such a question seems to me entirely beyond the ordinary province of an arbitrator. I agree therefore that a stay of proceedings in this action ought not to be granted.

Summons remitted to Justice in Chambers. Costs of argument to be dealt with by him.

Solicitors for the plaintiff, Norton Smith & Co.

Solicitor for the defendant, Gordon H. Castle, Crown Solicitor for the Commonwealth.