AustLII Home | Databases | WorldLII | Search | Feedback

High Court of Australia Transcripts

You are here:  AustLII >> Databases >> High Court of Australia Transcripts >> 2023 >> [2023] HCATrans 79

Database Search | Name Search | Recent Documents | Noteup | LawCite | Download | Help

Carmichael Rail Network Pty Ltd as Trustee for the Carmichael Rail Network Trust v BBC Chartering Carriers GmbH & Co. KG & Anor [2023] HCATrans 79 (9 June 2023)

Last Updated: 9 June 2023

[2023] HCATrans 079

IN THE HIGH COURT OF AUSTRALIA


Office of the Registry
Brisbane No B54 of 2022

B e t w e e n -

CARMICHAEL RAIL NETWORK PTY LTD AS TRUSTEE FOR THE CARMICHAEL RAIL NETWORK TRUST

Applicant

and

BBC CHARTERING CARRIERS GMBH & CO. KG

First Respondent

ONESTEEL MANUFACTURING PTY LTD

Second Respondent

Application for special leave to appeal


GAGELER J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 9 JUNE 2023, AT 11.00 AM

Copyright in the High Court of Australia

____________________

MR E.G. H. COX, SC: If your Honours please, I appear with MR D.J. REYNOLDS for the applicant. (instructed by Mills Oakley)

MR G.J. NELL, SC: If your Honours please, I appear for the first respondent. (instructed by Aus Ship Lawyers)

MR J.A. HOGAN‑DORAN, SC: If your Honours please, I appear for the second respondent. (instructed by HWL Ebsworth Lawyers)

GAGELER J: Thank you, Mr Nell and Mr Hogan‑Doran. Mr Cox.

MR COX: Your Honours, dealing with first question first, the test that we say should apply to an anti‑suit injunction based on a putatively invalid arbitration clause under Article 3(8) of the Australian Hague‑Visby Rules should be that the conduct of the foreign arbitration clause might reduce the carrier’s liability.

The test adopted by the Full Federal Court – which, if your Honours go to application book page 40, to paragraph 44 of their Honours’ reasons, in the second sentence beginning “In such circumstances” – was to consider whether the conduct of the London arbitration would in fact lessen the liability of the carrier.

GAGELER J: So, it is “might” instead of “would”, you say?

MR COX: Yes, your Honour, we say it is, consistently with the ordinary test for an interlocutory anti‑suit injunction, it would be the identification of a reasonably arguable prima facie case. The approach of the Full Court, by reason of the view they took of the undertaking, was to not consider what would be likely to happen, or what might happen, in the London arbitration, in particular if an English arbitrator was considering the meaning of, for example, Article 3(2) of the Hague Rules under English law consistently with the clause paramount.

He, or they, would inevitably be required to follow the House of Lords decision in Jindal Steel and that would reduce the carrier’s liability, thus invoking Article 3(8), making both the choice of law and the arbitration clause invalid. As your Honours will see from the first sentence in paragraph 44 ‑ ‑ ‑

EDELMAN J: Mr Cox, is your “might” as opposed to “would” issue one that is inconsistent with the Sky Reefer case, or can that decision be dealt with on the basis of the approach of the US law to anti‑suit injunctions?

MR COX: In our submission, it is inconsistent with the Sky Reefer test that would place a similarly – it is similar to the Sky Reefer test in that it places the high bar of establishing what would be likely to happen, unlike the earlier decision of Judge Friendly in Indussa of looking at what might happen and there being an onus on the defendant to show that the juridical advantage that the claimant would lose by suing in the forum chosen would be lost – which we say is the same approach to the onus of proof that this Court assumed – although it was not essential – in Akai v People’s Insurance Company.

We say that by the Full Court – I will just give your Honours the references, although there are in the written submissions, in the Full Court’s reasons on application book page 36 in paragraph 31 – the issue in the last line is described as “moot”. In page 39 of the application book at paragraph 41, it is described as “a matter for the Tribunal”, and at application book 40 at paragraph 43, the court declines to “speculate”. So, the way the Full Federal Court has approached it is not to consider what would in fact happen. That approach ‑ ‑ ‑

EDELMAN J: You have two issues though, do you not? That is the first issue, the “would” or “might” issue, and then the second issue is to bring the adverse consequences to which you refer within the scope of lessening such liability.

MR COX: Yes, your Honour. And the only way in which the Full Court dealt with it was by reference to the undertaking, rather than considering two aspects to that. Firstly, whether the undertaking would, in fact, be binding on the first respondent – and we say the Full Court took an erroneous view of the English equivalent to section 11 of the Foreign Judgements Act when they were considering section 33(1) of the Civil Jurisdiction and Judgements Act 1982 (UK).

Secondly, even if one assumed that the undertakings were binding, an arbitrator considering under English law how to interpret Article 3(2) of the Australian Hague-Visby Rules, the wording of which is identical to the same provisions in the Hague-Visby Rules in the Carriage of Goods by Sea Act (UK) would be bound to reach the same conclusion as Jindal Steel, and that would necessarily - - -

EDELMAN J: Assume all of that for the moment is correct, does that necessarily bring you within the scope of – and assuming that we are dealing with a “might”, does that necessarily involve lessening such liability, if the liability is loss or damage rather than the liability being elements of the negligent fault or failure in the duties?

MR COX: We would say that if it was possible for the carrier to delegate the performance or delegate liability for the performance of the loading function rather than merely its performance, that would lessen its liability because, consistently with Justice Sheller’s judgment in the Nikolay Malakhov, if the carrier has a non‑delegable duty to be responsible for the way the cargo is loaded, even if, for example, the second respondent, being the entity that, in fact, loaded the cargo into the vessel, caused its loss, the first respondent would be contractually responsible. By removing that liability by the Jindal Steel construction of Article 3(2) that would entirely remove the liability of the first respondent.

EDELMAN J: It might or it might not, but I think what I am putting to you is – and, again, assuming that Justice Sheller says what he says, or what you say he says in the Nikolay Malakhov Shipping Case – does that not go to the scope of the negligence fault or failure in the duties, rather than go to the liability for the loss or damage that arises from that negligence? In other words, questions of non-delegable duty might be said to be concerned with the scope of the negligence, rather than the liability that arises for the negligence.

MR COX: Perhaps the answer to that is to consider the other cases that have applied Article 3(8) in these contexts, and the first example is, perhaps, Lord Diplock’s judgment in The Hollandia. There, the difference between Dutch law and English law was that Dutch law would apply the lesser limitation regime, contractual defence under the Hague Rules, as opposed to the Hague-Visby Rules that would have applied under English law. Similarly, in the latter Court of Appeal decision in the Baghlaf (No 2), the Pakistan court would have similarly applied the different contractual limitation to damages. So, it is all of those contractual ‑ ‑ ‑

EDELMAN J: But they are both matters – to use the time‑honoured phrase – that go to the remedy rather than the right. So, limitation provisions either exclude or limit the remedy, rather than the right. Here, as I read some of the passages in the US decision in Sky Reefer, it seems to be drawing a distinction between the right arising from negligence, fault, failure in duties, and the remedy for breaches of that right, the loss or damage.

MR COX: The answer to that question is perhaps to take your Honour to an older case that predates the Hague‑Visby Rules, which is to the US Supreme Court’s decision in Knott v Botany Worsted Mills where the court held that on the similarly‑worded section 1 of the Harter Act, which has almost identical words to Article 3(8) it was held that what would otherwise be a defence to the liability question fell within the preclusion which would otherwise be limited in the way your Honour has put forward.

So, we would say that there is a long history of Article 3(8) applying more generally to contractual defences. There are no doubt others in the intervening 120 years that have taken the same broad view of Article 3(8). I just cannot give your Honours additional references whilst I stand here, but we would say that ‑ ‑ ‑

EDELMAN J: But ultimately, your submission is that if one is going to take a very broad view of 3(8), then there is no reason that it could not include costs, inconvenience and potentially different tests for delegability of duties.

MR COX: Yes, your Honour, and the support for that, most obviously, is the decision of Judge Friendly in Indussa, as later expanded in Justice Stevens’ reasons in Sky Reefer, that when one looks at the practical effects of a party being forced to go to another jurisdiction, there are a range of ways in which vicarious liability is reduced. One simply does not look at the way in which – and take the narrowest possible view, and that is consistent with the intention behind Article 3(8) to only permit a carrier to increase its liability but not reduce it, which has been the consistent purpose behind Article 3(8) in all countries that give effect to that convention since 1924.

The second way that the liability could also have been reduced was also the way in which the clause paramount selects only Articles 1 to 8 of the Hague Rules, which would be an additional way that an arbitrator, simply applying the clause paramount – if the first respondent is not bound by the declaration and admission made by the Full Federal Court, then, in those circumstances, an arbitrator simply applying clauses 1 to 8 of the clause paramount would apply the Hague Rules provision, including the damages provision, which has the much lower package limitation and weight limitation to damages.

GAGELER J: I note that your application for special leave to appeal does not follow the customary form of precisely identifying the gist of the ground of appeal. So, you are still dealing with proposed ground 1, which has two components.

MR COX: I am, your Honour. I suppose the – except in the force of your Honour’s observation, it is – in answering the question of onus or what is sufficient to engage Article 3(8), it is the incidental questions that arose as to how the liability would be lessened which become incidental to that overall question. And it becomes broader, as your Honour observes, and I accept the force of your Honour’s criticism that one needs to have those sub-elements of how the liability is reduced that follow from the question of onus, and whether the applicant is required to show any more than a reasonably arguable case, and whether the onus then shifts to a respondent to show that the juridical advantage would not be lost, consistent with this Court’s decision in Akai.

GAGELER J: Did you want to say anything more about ground 1?

MR COX: I will only say one additional thing, your Honour. In The Hollandia, after Lord Diplock set out his test by reference to the conditions subsequent, his Honour, at page 576, at points (d) to (e), expressed caution about the way in which Article 3(8) would operate in relation to arbitrations and the particular difficulty that arose if, during the course of an arbitration, the way in which the parties conducted the arbitration meant that the arbitration clause became invalid.

That has a particular operation in this case where, in effect, the Full Court has decided to consider whether in the London arbitration the conduct of the respondent, in particular, may mean that the arbitration clause becomes invalid partway through, whereas the court has otherwise accepted that the statutory prerequisites for Article 7 of the International Arbitration Act are proved without considering whether it is likely to become invalid. The court has just avoided that question entirely.

Can I deal, very briefly, with – sorry, just one final thing, I apologise. The other thing to note is that in Singapore, we say that the same approach – albeit only by a single judge – has been adopted as to the onus shifting to the respondent. We have included, your Honours, the reference to The Epar from 1984. So, we say there is a body of authority posing the test ‑ ‑ ‑

EDELMAN J: Well, it is Justice Stevens’ dissent in Sky Reefer combined with a might onus.

MR COX: Yes, your Honour. I accept that, your Honour. Could I deal very briefly with the second question?

GAGELER J: Yes.

MR COX: The Full Court – and I will not take your Honours to the precise passages, except that there was no evident statutory purpose for section 11 not regulating interstate trade. It was quite clear from the Convention Debates why intrastate trade was not regulated, having regard to the perceived constitutional limitation before The Owners of Kalibia v Wilson. The court described the error at paragraph 64 of their reasons as “anomalous”, at 65 as having “no evident rationale”. At paragraph 100, it was described as:

impossible to understand –


and characterised as an:

historical oversight or inattention rather than an unarticulated legislative policy.


One additional note we would make to support the submission that the omission was one that supported the applicant’s submission that the Parliament thought it had covered the field in respect of international and interstate trade. That was because in the United States, in the US Supreme Court decision of Knott v Botany Mills, a choice of law clause had been held invalid by reason of the equivalent of section 5 of the 1904 Act – by section 1 of the Harter Act.

That would support a proposition that the Parliament in 1904 had understood that it was regulating means by which a carrier could lessen its liability by selecting a foreign law, even though that was not as clearly stated in the parliamentary debates, by the Attorney‑General, in particular.

GAGELER J: So, what do we have to do with the words to get up on this point?

MR COX: We say that all was necessary was to add in to section 11(2) the additional words interstate trade or a contract within the meaning of section 2(b)(ii). If one added in those words consistent with the statutory purpose, that would not – it is set out in paragraph 93 of the Full Court’s reason in the application book at page 52. The additional words are set out there. So, it is “or section (10)(1)(b)(ii)”.

If those words are added into section 11(2)(b), we say that that would not introduce an impermissible excess of the separation of powers and otherwise be consistent with the established approach to statutory construction as articulated by this Court in Taylor or in Newcastle City Council v GIO – and that the Full Court were too conservative in the restraint that is otherwise there.

EDELMAN J: Well, there are actually a couple of different ways it could be drafted, I think, even on your submission, that the way the implication could be expressed could be by adding words to section 11(1)(a) as well.

MR COX: I accept the force of that, your Honour, and we say that none of those modest additions would have overstepped the limitation articulated by
this Court in Taylor and would otherwise infringe the usual restraint of the separation of powers of judicial inappropriate redrafting of legislation, and it was an appropriate case to read the words in to give effect to the statutory purpose.

That is all we wish to say in relation to the second question, your Honour.

GAGELER J: Yes, thank you, Mr Cox. Mr Nell.

MR NELL: If your Honours please, can I deal with the first question first? As I understand the submissions that have been put against us, and has been reiterated this morning, there are two elements: the “might” element – if I could describe it in that way – and then the second element, which is really as to the breadth of the scope of Article 3(8), and what it is intended to achieve; namely, a lessening of liability and what conditions of a contract are likely to fall foul of that, conditions lessening a liability and how that would operate in the context of a foreign jurisdiction clause or a foreign allocation clause, as here.

In relation to the first issue, true it was, my learned friends had sought an anti‑suit injunction seeking to restrain my client from enforcing its prima facie rights under an arbitration clause in a contract of carriage which was not otherwise struck down by section 11. Equally, my client sought a stay of the proceedings on the basis of the same arbitration clause.

In establishing the anti‑suit injunction, the ordinary principles of injunction undoubtedly apply, but the question which is fundamental to the anti‑suit injunction is that the arbitration clause is invalid, it is the basis upon which we were sought to be restrained from exercising our rights under that clause. It was invalid because it was contrary to Article 3(8) of the Australian amended Rules, which both parties agreed applied, and it was invalid because, having regard to the terms of Article 3(8), that clause – the arbitration clause – would lessen or relieve the carrier of its liability. That is what the applicant had to establish.

In our respectful submission, in looking at what the applicant has to establish in order to satisfy the precondition to the anti‑suit injunction – namely, that the clause is invalid – it has to do more than simply say that there might be a lessening of liability in some particular circumstance or some number of possible circumstances, and that that, (a), is sufficient to establish an entitlement to an anti‑suit injunction because, in our respectful submission, it is not entitled, it is not sufficient to strike down the clause.

Secondly, in the submission that appears to be put against us, is that having established whether it might lessen or relieve the liability, that the onus then shifts upon the respondent to establish affirmatively that that will not be the case and, in our respectful submission, there is no authority to support either that onus or that shift in onus.

EDELMAN J: You would accept, though, that the usual principles for an anti‑suit injunction would apply – including the “might” standard – if you might characterise it that way, but the “would” comes in at section 3(8) is your submission, as I understand it?

MR NELL: Yes, your Honour, that is correct. And that in the same way that in order to get an anti-suit injunction the plaintiff has to establish a prima facie case – and that might be a prima facie case which might be couched in terms of “might” and not definitely a certainty – but the question, we say, is that when one comes to striking – the court concluding that the arbitration clause is invalid, then one has to go further than that, it is not sufficient simply to prove that it might, one has to form the view that in the application in the present instance, it would.

That is reflected in, and consistent with what Lord Diplock said in The Hollandia, where the court there said that an arbitration clause or a foreign jurisdiction clause, ex facie, is not contrary to Article 3(8) and that is inconsistent perhaps with the Indussa approach but consistent with the Sky Reefer approach, but ex facie it is not inconsistent with Article 3(8). One has to look at how the clause would operate in the particular circumstances of the case. And in the following page from where that passage appears on the judgment, Lord Diplock makes plain that if:

it is established as a fact (either by evidence or . . . by agreement) –

that the operation of the foreign jurisdiction clause in applying the substantive law will result in the lessening or the relieving of the liability, then the obligation upon the court is to strike down and disregard that clause. And that is what is envisaged in terms of Article 3(8), in our respectful submission, not simply that the plaintiff might indicate areas in which it could possibly relieve or lessen the liability, it must go that one step further.

EDELMAN J: Mr Nell, it may be that the framing of it as “would” or “might” distracts from what the underlying principle really is, which on one view might be a principle about loss of a chance rather than a question of onus. So, consistently with a very broad view of 3(8) such as that adopted by Justice Stevens in the US Supreme Court, one might say that lessening such liability could occur if there had been a chance that had been lost to the applicant.

MR NELL: Well, I think that point, your Honour, comes down to what is the breadth and the effect of Article 3(8). And that brings in to play, fairly squarely, the difference between Sky Reefer and the Indussa as to what it is that one can have regard to. We say, consistently with what the Full Court did here and Sky Reefer and, really, the very terms of Article 3(8) that what one does is to look at some clause and its effect that would lessen liability or relieve liability. It does not refer to – in answer to your Honour’s question, it is not couched in the loss of a chance, but if it is suggested that the clause will operate in a way to lessen or relieve liability, that is what brings it into play, not that the applicant may have lost a chance to take an additional point, or something along those lines.

That leads me into the second aspect, and that is the issue of the breadth of the clause, your Honour, and I understand my learned friend advances the proposition which really was not put before the court below and was not addressed below, but the breadth of it is much broader, consistent with Indussa and with the dissent in Sky Reefer. But what we say in relation to that aspect, your Honours, is that Sky Reefer is the authoritative statement of the law in the United States as it is at the moment and to the extent to which it is inconsistent with the Indussa, it expressly overruled the Indussa in coming to the conclusion that it did.

The Full Court’s judgment is consistent with the Sky Reefer. The Sky Reefer decision and the Full Court’s decision are consistent with the plain terms of Article 3(8) which focus on, as your Honour Justice Edelman has identified, the liability of the carrier and whether the clause will have an effect that will either reduce or relieve the carrier of that liability.

To the extent to which there is reliance upon factors such as a need to call experts in London – and that may involve an additional cost – that does not address the very words of Article 3(8). It does not address the carrier’s liability. It is an additional cost to the plaintiff. Yes, it may be in a jurisdiction which is entitled to those costs, but it does not deal with the question of liability. The same can be said of much to the other factors that the plaintiff has identified in its submissions.

Importantly, your Honours, in relation to those factors, is that the approach of the Indussa also departs from that of the Full Court and of The Hollandia in this respect, that it seeks to emphasise – or, rather, it seeks to broaden the palette. It allows a conclusion that a foreign jurisdiction clause will limit the liability of the carrier not necessarily in the particular respects here, but just generally, because the mere fact that a claimant may have to go overseas, that that is said to, a fortiori, as it were, carry with it a limitation or restriction of the liability of the carrier and really is in support of a position which was reflected in the earlier US authorities but which is not reflected in the current authorities, not reflected in The Hollandia and not reflected in the Full Court’s judgment, and that is that when one looks at Article 3(8), it is necessary to focus on the particular claim before the court, the facts associated with that claim and whether the application of the rule to, in this case the foreign jurisdiction clause, is likely to lessen the liability in those circumstances, as I think it was in the Sky Reefer.

It said, for example, that if you have a claim for freight which would be subject to the London arbitration clause, on any view the claim for freight would not be a claim that would be relevant to the lessening or the relieving of the carrier’s liability for negligence under Article 3(1) and (2) of the Rules. Yet, on the Indussa approach and yet on the approach that is contended by the applicants, that arbitration clause would be struck down for all purposes, even though it does not contravene Article 3(8) in those circumstances.

GAGELER J: Mr Nell, in special leave terms, your argument is that the Full Court on this point was right, not that it is not an interesting question.

MR NELL: Yes, your Honour. But it is right and consistent with US authorities and the English authorities and really, on this issue the only – the authority that the applicants primarily rely upon is one that has been expressly overruled by the US. As we say in the submissions, and your Honours are alive to the point and I only need to mention it, construing the Hague Rules, construing COGSA, one has to do it beneficially and internationally consistently and, in our respectful submission, that is what the Full Court did in the light of Sky Reefer, notwithstanding that they were not referred to it, and what the applicant is seeking to do is, with respect, endeavouring to ask this Court to move Australia out of that way.

Can I deal, your Honours, just with the question of the undertakings that were proffered and also the circumstances that reliance is put upon them there. The two respects in which the applicant says that there is a concern, a risk that the Tribunal will depart is it will not apply the Australian Rules and it will apply – if it interprets them, it will interpret them in accordance with an English interpretation. It makes a third point about the possible operation of the old Hague Rules.

It says in relation to those – well, in relation to those, first, my client has – the plaintiff alleges that the Australian Hague Rules apply. My client admits that that is the position. It has given an undertaking that that will be position in the arbitration in London. The court has imposed as a condition of the stay that such an undertaking be given, and my client has given that undertaking to the court. In those circumstances where both the plaintiff and the defendant are contending before the London arbitration that the Australian Hague Rules will apply, then there is, in our respectful submission, no risk that the Tribunal will go off on a frolic of its own and form a different view or conclude that some other rules will apply.

There is one exception to that, possibly, but one that is not raised against us, and that is that if that agreement were itself contrary to mandatory English law which bound the English Tribunal such that the Tribunal was not able to give effect to that agreement, then that might be a circumstance in which the undertaking would be disregarded. And that was the situation in the Baghlaf Case that my learned friend referred to, where an undertaking ‑ ‑ ‑

EDELMAN J: Do you accept that English law on this point is actually different from Australian law?

MR NELL: On which point, your Honour?

EDELMAN J: On the issue of non-delegable duties?

MR NELL: Well, that is a separate issue, but on the issue of non-delegable duty, we do not accept that English law is necessarily different from Australian law. There is no authority of Australian decision on the issue. There is the dicta of Justice Sheller in Nikolay Malakhov, which, undoubtedly, would be given much weight.

Also, that – the Jindal decision; the Supreme Court decision – is based upon and follows two important English decisions: Renton v Palmyra and Pyrene v Scindia, both of which have also been followed and applied in this jurisdiction, so that the foundations for the English interpretation are consistent with the Australian law. There is no authority of determination or decision on Australian law; there is just obiter dicta.

The answer to your Honour’s question is that we do not necessarily accept that the Australian position is different from England; it is a matter that is open. But, relevantly in the context of the present proceedings, what my client has agreed and undertaken is that the Australian Rules will apply, and that they are to be applied as in Australia. Now, there is a debate about – we did not say “interpreted”, we said “applied” – and as the Full Court found, we say the application of the Rules must carry with it interpretation.

What is clear is in the arbitration that the undertaking that has been given is an undertaking that we will not contend for the application of English law or the application of an English interpretation of the Australian Rules. We will contend for an application of the Australian Rules as applied in Australia. It may be that that is consistent with English law; it may not be, but that is ultimately a matter for the Tribunal, in our respectful submission.

There is no risk, in our respectful submission, that if the Tribunal will depart from the position that is advanced by the parties, and including the respondent where it is given the undertaking; and to the extent to which it said, we are at a risk because the Tribunal – there are two final points I make in this regard, your Honour. The first, it is said, is that we are not bound by that undertaking, having regard to section 31(3) of the Civil Judgments Act, and that may well be right if we were to appear in the arbitration and to resile from that position.

There is no suggestion that we will do that. We have given an undertaking to this Court. There is nothing to suggest that we would not comply with that undertaking. The English Tribunal would not, on a frolic of its own, say to us, you are not bound by that undertaking, therefore I am going to depart from the way in which you are arguing the case.

Secondly, and in answer to the applicant’s concerns, if we were to depart from that undertaking the applicant would no doubt apply to the Federal Court to lift the stay on the basis that we breached the condition. The Federal Court is still seized of the proceedings, they have only been stayed. The court could reclaim the proceedings and give the applicant the anti‑suit injunction that it seeks, so that if the concern that the applicant identifies, the so-called risk, does come to fruition because we depart from our undertaking – there is no suggestion we would – then it is not, as the applicant suggests, that they are at the whim of the English Tribunal and that have no remedy.

They have remedy to bring it back exactly here. So, in our respectful submission, the fact that these undertakings were given, and the terms of the undertakings as such as to ameliorate the so-called differences or concerns that the applicants have ‑ ‑ ‑

GAGELER J: Ameliorate or remove entirely? Do you say it truly is moot?

MR NELL: Yes, your Honour. We say it is. And certainly, in terms of in the operation of the Rules, we say it is. Can I deal then, just briefly, with the second question, and the issues on the second question are really, in a sense, twofold, although one is, in our respectful submission, no issue. The first is as to the circumstances in which words will be implied into a statute in effect, in this case, to give it a meaning which is entirely inconsistent with the express words.

The Full Court applied the decision and the dicta of this Court in Taylor v The Owners – Strata Plan and, in our respectful submission, there is no uncertainty as to those principles, there is no need to revisit those principles, and what the Full Court did was conventional application of those principles. In particular, insofar as it found that the – this was not a case of simply remedying an ambiguity, there was no ambiguity in section (11). It was not a case of just remedying some typographical error or the like.

The second aspect is, well, it is premised on giving effect to a legislative intention. So, what is the legislative intention? And the legislative attention that our learned friends identify, and which the Full Court found on the evidence was not supported by the extrinsic materials, is that the legislative intention of the legislators almost 120 years ago in considering the 1904 Act, was giving effect to the Harter provision.

That has been superseded by the 1924 Act, and the 1991 Act. The Full Court found – and the applicant does not challenge – that there is nothing in the extrinsic materials to indicate that those legislators considered this question of the application of these provisions to interstate trade, or ‑ ‑ ‑

EDELMAN J: Legislative intention is not independent of the words of the statute, either.

MR NELL: No, it is not, but it is in the context of the statute, your Honours.

EDELMAN J: Yes.

MR NELL: And to the extent to which the legislation gave effect in 1924 and 1991, it was giving effect not to the Harter Act but to legislation of an entirely different system of rules, a more balanced system of rules. Admittedly, a system that had Article 3(8), it still had a provision similar to the section 5 of the 1904 Act, but in our respectful submission, one does not endeavour to read words into a 1991 Act on the basis of what legislators may have considered in 1904 in the context of a different Act.

EDELMAN J: As soon as one breaches the language of reading words in, then it cannot be an implication anyway because the implication is either there or it is not. If one needs to read it in, then it cannot be present.

MR NELL: If I can answer that question – yes, your Honour, that is, in part, our point. The applicant’s case is also put on the basis that the 1904 legislators thought that the legislation that they were implementing had this effect, and it is put against us that they were right. Well, if that is correct,
then there is no need to read words into a 1904 Act or any other Act, and if that was the same in relation to Article 3(8), the position would apply. Equally, if they were wrong in those respects then, in our respectful submission, that does not justify reading those words in either.

Those are our submissions, your Honours.

GAGELER J: Thank you, Mr Nell. Mr Hogan‑Doran, do you have anything to add?

MR HOGAN‑DORAN: No, your Honour.

GAGELER J: Mr Cox, reply?

MR COX: Very briefly, your Honour. In relation to the undertaking, the notion that if there is a breach by the respondent when it comes to plead and conduct its case in London can be remedied by removing the stay here. That approach, waiting to see what happens and coming back, was expressly rejected by the UK Court of Appeal in Baghlaf (No. 2) and we say that, properly consistently with what this Court said in Akai, one has to consider what would happen and whether the juridical advantage would be lost.

To the extent my learned friend says, well, there is no evidence that his client will not comply with the undertaking, one could perhaps make those same observations about the final paragraph of this Court’s judgment in Akai v People’s Insurance Company which referred to the existence of the London proceedings in a dormant stage, and one probably would not have predicted what was going to happen before Justice Thomas and that the People’s Insurance Company would contend it was not bound by the High Court of Australia’s decision. So, history perhaps tells against the notion that one would need evidence on that front.

A second matter, my friend referred to The Hollandia and the Indussa being inconsistent on ex facie invalidity of arbitration clauses. In our submission, that is to overstate the effect of the Indussa’s reasons, even as explained by Justice Stevens in Sky Reefer, either in respect of costs or freight, because all we are contending for is that in an appropriate case the respondent contending for the enforcement of the arbitration clause is required to prove that the plaintiff will not lose the juridical advantage.

So, in adopting the freight example, no doubt a respondent seeking to enforce the arbitration clause can contend that there will be no application and it will be enforceable, and, similarly, in relation to the costs, there may be many arbitrations where the costs would not fall foul of what Justice Stevens describes. In respect of the loss of a chance analysis from
Justice Edelman’s question, we would respectfully adopt that analysis, to the extent it was not part of our earlier argument.

Those are the matters in reply, your Honour.

GAGELER J: Thank you. We will adjourn momentarily to consider the course we will take.

AT 11.42 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.44 AM:

GAGELER J: There will be a grant of special leave to appeal in this matter limited to ground 1. Mr Cox, you will be expected to give some attention to the articulation of that ground, spelling out each of its elements.

MR COX: Yes, your Honour, I understand the force of that.

GAGELER J: Would this be a one-day matter, gentlemen?

MR COX: Yes, your Honour.

GAGELER J: Very well. Thank you.

AT 11.45 AM THE MATTER WAS CONCLUDED


AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.austlii.edu.au/au/cases/cth/HCATrans/2023/79.html