Before I analyse the two approaches, it is worth considering what a maritime lien is under Australian law. The theoretical explanation of a maritime lien begins with The Bold Buccleugh7. There, Sir John Jervis giving the advice of the Privy Council said that a maritime lien had its origin in the civil law and:
“a maritime lien is well defined by Lord Tenterden to mean a claim or privilege upon a thing to be carried into effect by legal process; and Mr. Justice Story8 explains that process to be a proceeding in rem, and adds, that wherever a lien or claim is given upon the thing, then the Admiralty enforces it by a proceeding in rem, and indeed is the only Court competent to enforce it. A maritime lien is the foundation of the proceeding in rem, a process to make perfect a right inchoate from the moment the lien attaches …”
However, a maritime lien does not require or include possession of the res. Critically, as Scott LJ demonstrated in his seminal judgment in The Tolten9, the principle that a maritime lien automatically attaches to a ship is “indubitably a rule of substantive law”. He also said that the principle underlying the general law of the sea was the protection of maritime commerce10. In The Two Ellens11 the Privy Council said:
“A Maritime lien must be something which adheres to the Ship from the time that the facts happened which gave the Maritime lien, and then continues binding on the Ship until it is discharged, either by being satisfied or from the laches of the Owner, or in any other way by which, by law, it may be discharged. It commences and there it continues binding on the Ship until it comes to an end.”
Scott LJ explained that a lien has to be admitted or proved to exist in the proceedings. Once that condition has been satisfied he said that the lien consists in the substantive right of putting into operation the Admiralty Court’s function of arresting and selling the ship so as to give a clear title to the purchaser and thereby enforcing distribution of the proceeds among the creditors in the order of priorities12. In Comandate Marine Corporation v Pan Australia Shipping Pty Ltd13 Allsop J observed that, at least before any unconditional appearance of a relevant person, the proceeding in rem is an action against the ship herself, and not against the owner or demise charterer14.
As we know, often the Court exercises Admiralty jurisdiction because of the adventitious and transient presence of a ship in the local waters. The events giving rise to the proceedings frequently have nothing to do with the locality of the ship when arrested and the Court will apply another country’s maritime laws to resolve the proceedings. We can easily recognize that maritime liens and contract claims concerning ships have an international character because frequently they will arise under the law of another country. Often the local court must make a decision as to what law applies and use municipal or domestic choice of law rules to arrive at that answer. Under English law, as Lord Wright said in Admiralty Commissioners v Valverda (Owners)15, a maritime lien cannot be created by contract.
In The Tolten16 Scott LJ was dealing with a maritime lien for collision damage, but there is a division of opinion whether the following passage of his judgment should have a broader application:
“It has been characteristic of English judges exercising admiralty jurisdiction as I have already said, to look to “the general law of the sea” for two allied, but distinct, purposes: first to resolve doubts on a question of English law by adopting what they believed to be the relevant rule of the “general law”; and secondly, as a principle of judicial policy in order to avoid creating divergence by our law from the general law. The importance to maritime commerce of uniformity in all seas, the world over, has received frequent emphasis, both before the Judicature Acts and since.”
That view has powerful critics and is now probably too broadly stated for both Australian and English law purposes. That is because in Blunden v The Commonwealth17 Gleeson CJ, Gummow, Hayne and Heydon JJ appear to have adopted Lord Diplock’s explanation in The Tojo Maru18of the nature of the principles of maritime law or the maritime law of the world. Lord Diplock said that apart from the special field of “prize” in times of hostilities, there was no “maritime law of the world”.
Rather, he said that the maritime law consisted of the internal municipal laws of sovereign states that were capable of giving rise to rights and liabilities enforceable in English Courts. Lord Diplock observed that those internal municipal laws, relating to what happens on the sea, may show greater similarity to one another than in respect of laws relating to what occurs on land. He said that was because of both the nature of the subject-matter and the historic derivation of those municipal laws from sources common to many maritime nations. He concluded19:
“But the fact that the consequences of applying to the same facts the internal municipal laws of different sovereign states would be to give rise to similar legal rights and liabilities should not mislead us into supposing that those rights or liabilities are derived from a “maritime law of the world” and not from the internal municipal law of a particular sovereign state.”
Allsop J drew on these remarks to emphasise that the international character of the Admiralty and maritime jurisdiction of Australian Courts under s 76(iii) of our Constitution, and the law that Courts ascertain and declare in the exercise of that jurisdiction, does not elevate the resolution of those controversies, or the applicable law governing that resolution, above the municipal law and its context20.
These authorities highlight the need to keep in mind the distinction between a court’s jurisdiction, in the sense of its authority to decide a controversy derived from its municipal law, and the choice of the law applicable to that resolution that arises because some or all of the circumstances giving rise to the controversy occurred outside the municipal jurisdiction21.