The parties were in a charterparty arrangement in which Laemthong International Lines Co Ltd (Laemthong) was the voyage charterer and BPS Shipping Ltd (BPS) was the disponent owner. Laemthong was carrying a cargo of bagged rice aboard the vessel Nyanza but failed to fumigate it, resulting in the cargo becoming infested with vermin. As a result, the Nyanza was arrested once it reached Nouakchott, Mauritania. When a vessel owned by Laemthong, the Laemthong Pride, arrived in Darwin, BPS commenced proceedings in rem against it in order to recover its loss and in respect of a breached implied term of the charterparty. The ship was arrested.

Laemthong acquired special leave to appeal to the High Court.

Held: Appeal dismissed.

The issue on which the High Court allowed the appeal was whether the Laemthong Pride could be a surrogate vessel for the Nyanza so as to satisfy s 19 of the Admiralty Act 1988 (Cth) (the Act) and allow BPS to take advantage of it.This was the only point in contention in this case.

Brennan CJ: His Honour agreed with the conclusions of the majority in this case, while clarifying his stance that s 3(6) did not assist to define s 19 of the Act. On the other hand, s 19 gave meaning to s 3(6) and allowed it to be understood. The meaning of 'surrogate ship' from s 3(6) applied to the arrests of ships under ss 15, 17, and 18, and second ships under s 19. There is no requirement that an action being brought against a second ship under s 19 should be a claim in rem that could be brought under ss 15, 17, and 18. Section 19 was about the 'relevant person', which means an individual against whom an action could be brought in personam.

The appeal should be dismissed.

Toohey J: There was no dispute that BPS did not have a general maritime claim against Laemthong within the meaning of s 4(3) of the Act. The focus was on Laemthong's status and whether it was the owner, charterer, or was in possession or control of the Nyanza. Laemthong argued that what was meant by 'charterer' under s 19 was determined by the words before and after it, which gives the impression of a disponent owner with both possession and control over the ship - that is, a demise charterer.

Toohey J described this approach to statutory interpretation as 'construing particular words by reference to some common feature', resulting in a reading of the section where 'charterer' had a narrower meaning than was intended. The common feature here of possession or control was not an appropriate one because a mortgagee or salvor could be in possession of a ship to the exclusion of its actual owner at any point in time. The words 'owner', 'charterer', and a person 'in possession or control' of a ship did not all mean the same thing or belong to the same genus.

Had the drafter wanted to specify that s 19 applied only to owners and demise charterers, this could have been done, as in s 18(b). At various points throughout the Act, the term 'charterer' or 'demise charterer' is chosen. The differentiation between these appeared deliberate, so it would be wrong to construe s 19 as referring only to demise charterers when this was not laid out in the text.

Under s 18 of the Act, moreover, a 'relevant person' does not need to be a demise charterer (only an owner, or charterer of a ship, or in possession or control of it) until proceedings are commenced for an action in rem to be valid. If a voyage charterer was not a demise charterer by that time, then proceedings in personam could still be commenced.

Importantly, Australia was not, at the time this case was decided, a party to the Arrest Convention 1952. Reference was made to the Australian Law Reform Commission's 1986 report, Civil Admiralty Jurisdiction, which states at para 131 that, given the Arrest Convention 1952's reluctance to distinguish between different sorts of charterers for the purpose of arresting them, Australia should follow that example and not that of the conflicting overseas legislation.

His Honour thought the appeal should be dismissed.

Gaudron, Gummow, and Kirby JJ: Their Honours referred to the judgment of Lord Denning MR in The Banco [1971] P 137, where the Arrest Convention 1952 was discussed, in particular its merits of affording greater opportunity to plaintiffs of recovery by allowing them to arrest a sister ship belonging to the same wrongdoer. Again the point was made that while the UK had become party to the Convention, Australia had not, with the implication that to follow the UK's example would be advantageous.

The general reasoning, and the conclusions reached, were much the same as those of Toohey J.