The High Court recently dismissed(1) an application for stay of in rem proceedings brought under its maritime jurisdiction on the basis that the applicant had not established that New Zealand was not forum conveniens. 

Facts

The plaintiff was a member of the crew on the ship MV Pelican and brought a claim against the ship for wages, superannuation and damages. The ship was registered in New Zealand and operated as a dredger in New Zealand waters. Although the plaintiff had filed its claim in rem, it had notapplied for the arrest of the vessel at the time that the application for a stay was heard. The vessel charterer was the plaintiff's employer and applied, in the capacity of an intervener, for the in rem proceeding to be stayed. The intervener filed a statement of defence in the in rem proceeding denying the claim and asserting that the terms of the employment agreement were contained in an Australian industrial agreement. 

The application for stay was based on the fact that the contract in dispute was an Australian contract governed by Australian law which contained a clause referring disputes to the relevant industrial union in Australia. The applicant also claimed that because witnesses were based in Australia or overseas, a New Zealand court was not the forum conveniens. 

Decision

It was clear that the New Zealand court had jurisdiction to hear the claim in admiralty under Section 4(1)(o) of the Admiralty Act 1973. Actions in rem against a ship are provided for in Section 5 of the act. The court noted that if the stay had been granted, the plaintiff's ability to bring an admiralty action in the forum of its choice would have been removed, and it was financially unable to bring the claim in Australia. The judge stated that the jurisdiction to grant a stay would be exercised if the court concluded that New Zealand was forum non conveniens. 

The court relied on the principles set out in The Spiliada.(2) In that case it was found that the term 'forum non conveniens' is not particularly apt if the court is in fact looking at what is more 'convenient'. The true definition of the term, it held, focuses on what is more preferable for securing the ends of justice, and whether pursuit of the litigation in that alternative forum is more likely to secure those ends. 

The court discussed the nature of claims by seafarers for wages. It noted that the ability to proceed in rem against a ship provides full security for the claimant in such cases, and a proceeding in personam in Australia would not provide the same security. It then went on to consider whether the employment agreement was an Australian contract. 

Ultimately, the judge did not consider it necessary to resolve the issue of the status of the employment agreement or to determine which law governed the dispute. He decided that the Australian union was not a better forum for resolution of the dispute, and that the fact that witnesses would have to come from Australia would not involve considerable inconvenience or expense, as the witnesses could give evidence by video link. Legal costs were likely to be considerably greater in Australia than in New Zealand, such that the plaintiff would be unable to continue its claim if required to litigate in Australia. 
The court declined to exercise its discretion to grant a stay and dismissed the application. 

Comment

It is curious that more emphasis was not placed on the importance of obtaining the security that the admiralty in rem jurisdiction provides to a claimant. It is well established that a stay ought not to be granted in an in rem claim where a plaintiff has obtained, or could obtain, security, unless the security already obtained is kept in place or an undertaking is given to the New Zealand court to provide such security.(3)

Endnotes

(1) Udovenko v The Ship MV Pelican (HC Wellington CIV-2009-442-0514 Gendall J November 8 2010).

(2) Spiliada Maritime Corp v Capsulex Ltd [1987] AC 460 (HC).

(3) See Fournier v The Ship Margaret Z [1997] 1 NZLR 629, and Turners & Growers Exporters Limited v The Ship Cornelis Verolme [1997] 2 NZLR 110.