MARSHALLS' MANUAL CHAPTER 8: ACCOUNTING AND RELATED MATTERS

[8.1] Marshal's fees

In-house Marshal's fees (staff costs) are borne by the Court and should not be recovered from the plaintiff or other party or res unless, for example, additional staff are required to replace, or perform the usual duties of, the Marshal. However, a log of the time spent on an arrest should be kept so that the impact of the arrest on the resources of the registry can be monitored.  

Annexure 2(b) is an example of a log for this purpose.

All expenses reasonably incurred by the Marshal are recovered from the relevant party or proceeds of sale.

The Court's Admiralty Committee discussed this issue at its March and August 2006 meetings in light of the impact of the Federal Court of Australia Regulations (item 21 (previously item 17) of Schedule 1).

[8.2] Marshal's remuneration

For in-house Federal Court Marshals the level of remuneration that may be recovered is that of Federal Court Staff Level 6 (FCSL 6). 

Marshals who are beyond this salary level are paid at their current salary rate.

In accordance with the FCA Certified Agreement 2011-2014 a Marshal is paid an on-call allowance that commences with the arrest of a vessel and ceases on its release unless the relevant District Registrar and the Marshal agree that an earlier date is appropriate in the circumstances of a particular arrest (see para 43.1 of the agreement).

[8.3] Marshal's delegations

The Financial Management and Accountability Act 1997 provides for the Chief Executive of the Court to delegate his power under section 44 of the Act to approve proposals to spend money out of funds appropriated by the Parliament and to enter into Commonwealth contracts or agency agreements for the services of the Court to officials occupying from time to time positions specified in the schedule to the delegation. 

The delegations and the Court's financial policies are contained in the Chief Executive Instructions. These delegations include staff carrying out the Marshal's function.

The Marshal's financial delegation is based on the remuneration at FCSL 5. The maximum amount of the delegation is $5,000 or to the value of funds held against the matter in the Court's Special Public Money Account (Official Marshals Account). 

The amount held against the matter is the balance of the Marshal's Receipt and Expenditure Record as reconciled with the project code balance.

[8.4] Marshal's Account

The Marshal's bank account is a separate account to the Court's other funds.

 The following documents will be of assistance in using the Marshal's bank account:

• Guide to Admiralty Processing
• Annexure 24(a) Financial One Code Structure
• Annexure 24(b) Sample Project Code Ledger
• Annexure 24(c) Project Code Balances.

Otherwise, contact Matthew Davis, Senior Accountant, Finance Department in the Principal Registry on 02 9230 8823 for further assistance.

Where a registry is seeking reimbursement for the salaries and expenses of a Marshal incurred during an arrest, money will need to be moved from the Marshal's account into the Marshal's section 31 account. 

Instructions for this transfer are at:

• Instructions for the Transfer of Moneys to Marshal Section 31 Account.

[8.5] GST on Marshal's costs and expenses

A paper on 'GST as it Relates to Marshal's Costs and Expenses and the Sale of Ships' is set out at Annexure 21.

The current position on GST on Marshal's costs and expenses is set out in an exemption determination. 

The Treasurer made a Determination under section 81-5 of the A New Tax System (Goods and Services Tax) Act 1999 being A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2006 (No. 2).

Item 2.34 in the schedule means that Marshal's costs and expenses under rules 41 and 69 of the Admiralty Rules 1988 payable in respect of the arrest, custody and sale or release of a ship or other property under the Admiralty Act 1988 are exempt from GST from 1 January 2007.

The effect of this Determination is that GST is not payable on Marshal's costs and expenses nor on any demand made by the Marshal.

[8.6] Tax invoices

The Australian Taxation Office has issued a publication on valid tax invoices and GST credits. Tax invoices are important documents for the operation of the GST system. They must contain certain information to be valid.

A supplier must issue a tax invoice if any taxable sales made are more than $82.50 (including GST) and the purchaser requests it.

For taxable purchases the Court can use tax invoices to claim the correct amount of GST credits for those purchases.

To claim a GST credit for purchases that cost more that $82.50 (including GST) the purchaser must be registered for GST and have a valid tax invoice. If an incorrect or incomplete tax invoice is used to claim a GST credit, the GST credit may not be allowed by the ATO.

To claim GST credits for purchases that cost $82.50 or less (including GST) the purchaser must keep documents such as cash register dockets, receipts or invoices to support the claim.

The supplier must be registered for GST before a claim of the GST credit on a purchase can be made.

What is a valid tax invoice?

A valid tax invoice for taxable sales that total less than $1,000 or $1,000 or more must contain the following:

Taxable sales that total less than $1,000	Taxable sales that total $1,000 or more
the words 'tax invoice' stated prominently	the words 'tax invoice' stated prominently
the name of the supplier	the name of the supplier
the ABN of the supplier	the ABN of the supplier
the date of issue of the tax invoice	the date of issue of the tax invoice
a brief description of the goods or services sold	the name of the recipient
the total price of the sales (including GST).	the address or ABN of the recipient
	the quantity of the goods or the extent of the services sold
	a brief description of the things sold
	the total price of the sale (including GST)

Where the GST to be paid is:

• exactly one-eleventh of the total price, the tax invoice should show the GST amount separately or provide a statement such as 'total price includes GST'; or
• less than one-eleventh of the total price, the tax invoice should show the GST amount and the total amount excluding GST for the sales.

A valid tax invoice for both a taxable sale and either a GST-free or input taxed sale, must also:

• clearly identify each taxable sale
• show the total amount of GST to be paid; and
• show the total amount payable for the sales.

The tax invoice must contain this information before it can be used to work out the correct amount of GST credit that can be claimed. This is because the amount of GST included on such an invoice will be less than one-eleventh of the total price you are liable to pay.

[8.7] Vehicle costs

The costs of vehicle usage for the arrest of a ship during the custody and on release of the ship should be applied as follows:

(a) where Court vehicles are used the costs will be borne by the Court;

(b) where a non-Court vehicle is used (such as a rental car or the Marshal's private vehicle) the costs will be recovered from the plaintiff.

Annexure 2(c) provides a sample vehicle log.

[8.8] Procurement of large expense items

It will be necessary from time to time for the Marshal to procure large expense items (over $20,000) during an arrest and custody of a ship. 

The policy on procurement of these items is set out in the Chief Executive Instructions and generally provides that three quotations are to be obtained. Expenses incurred by the Marshal that may fall within this category include berthing charges; bunkers and lubricants, tugs, specialised equipment, provisions and other services. 

The procurement of these items or services may be from a sole supplier based at or near the port or berth where the ship is held under arrest. It is the case in some smaller ports that there will be one tug provider, one company that provides linesmen, one ships' providores and more than likely one agent of a fuel supplier that can arrange bunker supplies.

Usually berthing arrangements are made by the ship's agent prior to the ship berthing and in any event the port authority may be the only provider for the size of ship that is under arrest. 

It is incumbent upon the Marshal to secure the most economical rate for any cost or expense incurred by the Marshal regardless of whether there is a sole supplier or competitive quotes can be obtained. 

Where the port authority controls the berth experience has shown that they will negotiate a much cheaper rate for the Marshal and more so if there are indications that the arrest will be prolonged or the vessel will be sold.

In other circumstances the ship's agent or the charter or owner of the ship may have an agreement with a supplier such as ship's providore to victual the ship (food and stores). 

The arrangement can continue while the ship is in custody provided there is no excessive charging and the rates of charge are similar to previous prices charged by that supplier. All lists prepared for food and stores must bear the Master' signature and the ship's stamp.

In the circumstances where there is a sole provider of the goods and services the Marshal should make a file note of the enquiries made to establish there is no other provider of those goods and services and the rates are reasonable. In the case of berthing charges a letter from the Harbour Master (or other appropriate person) stating that they are the sole provider and setting out the agreed rates would suffice.

Where there are other competing suppliers of the goods and services copies of the quotations obtained should be retained on the Marshal's file for internal checking and audit purposes.

[8.9] Court orders for supplies and services

It would not generally be the case that where there is a sole provider of goods and services the Marshal obtains a Court order or a direction to engage that supplier. It is more the position where the Court has ordered a ship to be sold and payments are to be made from the sale Fund (the res). 

It is the practice of the Court that payments from the sale Fund are transparent and controlled by the Court. In this way the sale is supervised by the Court. The Court order that is made to open a foreign currency account provides the name and position of the signatories and limits the amount of a payment that can be made by the Marshal from the Fund. Usually the amount is limited to US$2,000.00 to be drawn from the account without the further order of the Court.

In practice payments are usually scheduled in an affidavit and an order is obtained and this is the preferred course to take.

There are occasions where the Marshal may approach the Court for an order such as moving a ship to another berth, mooring or to anchor at the request of the Harbour Master. 

Whilst the Court order may not approve the payment it does order the Marshal to move the ship and should include that the costs of the move form part of the Marshal's cost and expenses of the arrest. The Marshal should make arrangements at reasonable rates within the time constraints.

Shortly after an arrest and where the need arises the Marshal may approach the Court for an omnibus order. That order may allow the Marshal at his or her discretion to take measures to preserve the ship; move the ship within the limits of the port; supply reasonable victuals, fuel, water and communications and to arrange medical attention for any member of the crew. 

Where the circumstances allow the Marshal should provide the supplies and services at competitive rates unless there are existing arrangements or a sole supplier.

The Marshal may at any time apply to the Court for directions pursuant to rule 48. 

This process has been used by the Marshal when seeking large amounts of funds to cover the supply of provisions, marine gas oil, berthing charges, insurance and other Marshal's expenses where the ship had exhausted its provisions and required an urgent fuel delivery. 

It has been used to obtain orders to replace essential officers and crew, for example, the Master, engineers and other key crew members where they were randomly leaving the ship during the sale process.

As the cost of engaging crew was significant and crew levels had to be maintained until the ship was sold the Marshal obtained orders that the crew costs be funded by the plaintiff as Marshal's costs and expenses.

[8.10] Reconciliation of accounting records

In accordance with audit requirements, the Marshal must reconcile his/her accounting records monthly, when the ship is released from arrest, when it is sold and when the project code or account is closed.

A procedure setting out the process to be followed by the Marshal is at Annexure 22. Included with the procedure is the Finance One code structure and copies of a Project Code ledger and Project Code balances. 

The Form of Reconciliation can be found at Annexure 2(e). 

The procedure also addresses the transfer of funds where amounts need to be charged to the Marshal's account to reimburse Court funds for payments incorrectly coded. It also sets out what should be done to close the account.

[8.11] Review of Marshal's records

There needs to be a review of the final reconciliation of invoices and expense logs to arrest accounts prior to closure of the arrest account. The review and signing off of checklists, reconciliations and other documents will be undertaken by staff within the arresting Registry appointed by the District Registrar.

That person will also sign the Control Sheet as Checking Officer for the Control Sheet (see Annexure 23).

http://www.fedcourt.gov.au/law-and-practice/areas-of-law/admiralty/jurisdiction/marshals_manual/chapter-8

MARSHALS' MANUAL – CHAPTER 7: APPLICATION TO DETERMINE PRIORITIES

[7.1] Who may apply for determination of priorities

Subrule 73(1) provides that:

If a ship or other property has been arrested in a proceeding, a person who has obtained a judgment in a court (including a judgment in a court of a foreign country) against the ship or property, being a judgment that is enforceable in a court of Australia, may apply to the court for determination of the order of priority of claims against the ship or property.

[7.2] Notice of application

The Court may order the Marshal to publish a notice of the application in domestic and international publications. The prescribed form of notice is Form 28, Notice of application to determine priorities. Always obtain proofs of the advertisement and the costs for each advertisement before it is published and formally notify approval to the publishers. The Marshal will also require a 'cutting' of each advertisement showing the date, page number and the name of the publication or the printed page containing the advertisement.

Advertisements for the Lloyds List are published in the London edition. 

Some advertisers will only accept credit cards and card details are required at the time of placing the advertisement.

[7.3] Affidavit of publication

The Marshal should prepare an affidavit stating he/she caused the notices to be published in accordance with Form 28 of the Admiralty Rules. A copy of each advertisement should be annexed to the affidavit, together with a schedule of the costs incurred and a copy of all accounts payable for advertising.

If the Marshal has not complied with the Court order this should be addressed in the affidavit. Any affidavits sworn and filed by the Marshal should be served on all the parties.

[7.4] Paying monies out of the proceeds of sale

To comply with accounting and audit requirements, the Marshal should only pay money out of the proceeds of sale in accordance with an order that payment be made to a particular claimant for an amount as stated. This is the case even if a general order has previously been made that the expenses of arrest or sale are to be paid out of the proceeds of the sale.

[7.5] Protecting the proceeds of sale

The Marshal has a responsibility to maintain and protect the proceeds of sale. As a general policy, unless otherwise ordered, the proceeds should be preserved in the same currency as the ship was sold.

http://www.fedcourt.gov.au/law-and-practice/areas-of-law/admiralty/jurisdiction/marshals_manual/chapter-7

MARSHALS' MANUAL CHAPTER 6: VALUATION AND SALE OF SHIP

Note: The work involved for the valuation and sale of a ship may vary according to the circumstances of the case and the orders made by the Court. This chapter attempts to provide a general outline of the matters to be considered and how to conduct a sale by tender.

[6.1] Who may apply for order for sale

Any party may apply to the court for an order that a ship or other property that is under arrest in the proceeding be valued, valued and sold, or sold without valuation (subrule 69(1)). In most cases the Marshal will, through dealings with the parties, be aware of a party's intention to file an application for an order for valuation and sale.

If the applicant for sale has not commenced in rem proceedings against the ship then the Court will require that they do so before an order for valuation and sale will be made.

Preparation before order for valuation and sale

[6.2] Third party property

The Marshal should ascertain whether there is any equipment or other property on board the ship that is not owned by the owner, operator or charterer of the ship and could be the subject of a claim by a third party (eg leased equipment).

[6.3] Contact ships brokers

The order for valuation and sale will usually include an order that the Marshal engage a ships broker. The Marshal should make contact with brokers to ascertain if they will act for the Marshal in the sale of the ship and if they deal in that type of ship. Brokers should be asked to provide career details of each broker employed by the company and a list of sales and purchases undertaken over (say) the last twenty years. The Marshal may also ask the broker to provide proposed terms of engagement that sets out the obligations of the broker in conducting the sale of the arrested ship on behalf of the Marshal. These obligations should include:

(1) providing for a valuation to be sent directly to the Marshal in accordance with Court orders;

(2) arranging and undertaking an advertising and marketing program in accordance with Court orders (with actual costs of advertising to be reimbursed by the Marshal on presentation of copies of the relevant invoices);

(3) providing prospective buyers with general information, copies of the ship's plans and copies of the Marshal's Conditions of Sale;

(4) arranging on-board inspections;

(5) if the sale is by closed bid tender – receiving sealed bids and presenting them to the Marshal on the tender closing date;

(6) acting solely on behalf of the Court as brokers only.

The engagement proposal will include the broker's remuneration (usually 0.75 to 1% of the final accepted gross price of the ship). The remuneration should expressly exclude the value of bunkers and lubricants.

[6.4] Legal advice

The order for valuation and sale may include an order that the Marshal retain a solicitor to act on the sale of the ship. If so, the Marshal should arrange for the solicitor (or otherwise a Registrar) to review the Marshal's Conditions of Sale (see Annexure 15) to ensure that they are up to date and all the terms are appropriate for the sale of the ship.

[6.5] Estimate of costs of valuation and sale

The Marshal should prepare an 'Estimate of Costs of Marshal's Expenses in relation to the Valuation and Sale of MV (Insert name)'. The broker may be the best (only) valuer. This estimate should be based on a period of eight weeks from the date the order for sale was made to the date of delivery of the ship. Although the sale period may take ten weeks to complete any remaining costs not funded by the plaintiff can be met from the sale fund. Costs to be estimated may include:

• Marshal's solicitor's and counsel's fees;
• brokerage fee;
• advertising;
• inventory survey;
• bunkers and lubes survey;
• repatriation of any remaining crew;
• berthage/mooring charges;
• insurance;
• effluent waste removal;
• garbage waste removal;
• marine gas oil and bunker fuel
• provisions for the crew;
• laundry expenses;
• medical expenses;
• ship's mobile phone hire and call charges;
• chemical, stores and equipment for the ship;
• Marshal's car and taxi hire;
• Marshal's water taxi and launch hire;
• Helicopter hire.

[6.6] Seek money on account of costs and expenses of sale

Subrule 69(4) of the Rules provides that an application for an order for valuation or sale constitutes an undertaking by the party who made it to pay, on demand, to the Marshal an amount equal to the amount of the costs and expenses of the Marshal in complying with the order.

If the Marshal is provided with an advance copy of the application for sale then it may be prudent to forward, as a draft, a copy of the estimated expenses addressed to the parties care of their solicitors and identifying the amount on account of expenses that will be sought.

If the application for sale has been filed then a formal demand pursuant to subrule 78(b) based on the costs estimate should be made to ensure the Marshal has sufficient funds to pay accounts as they fall due (see Waitemata Stevedoring Services Pty Ltd v The Ship "Rangitata" & Anor [1998] FCA 441 where Lindgren J held that Rule 78(b) clearly empowers the Marshal to make one or more demands for interim payments on account of fees or expenses yet to be incurred, and is not confined to enabling the making of demands for interim payments on account of fees or expenses already incurred).

If the party making the application is out of the jurisdiction there may be difficulties enforcing any undertaking. In this case, expenditure should not be incurred unless funds have already been received from the applicant or some other form of acceptable security has been given.

If the Marshal is any doubt then a Deputy Registrar (Admiralty and Maritime) may be consulted.

Order for valuation and sale

[6.7] Order for valuation and sale

Precedent orders for valuation and sale are set out at Annexure 16. Other precedent orders can be found in Casetrack, on the Intranet (Casetrack Precedent Order Text) and on the Internet at the Information for Practitioners section and then select 'Admiralty and maritime' option, followed by the 'Admiralty and maritime practice in the Federal Court' option. The address is: www.fedcourt.gov.au/law-and-practice/areas-of-law/admiralty/jurisdiction/precedent-orders-text.

[6.8] Notify broker that order for sale has been made

Sealed copies of the orders should be provided to the broker as soon as possible. The terms of engagement should be executed if this has not already been done.

[6.9] The valuation

The Marshal should ensure that a valuation is received from the broker. The envelope containing the valuation should be properly sealed and held in the District Registrar's safe until further directions are made by the docket Judge or until after the time for bids has closed.

The valuation is confidential and should not be disclosed to anybody unless ordered by the Court to do so.

[6.10] Advertising the sale

The broker may, in addition to making recommendations about the method of sale, make recommendations about the advertising strategy, including the length of any advertising campaign, to be adopted.

The Court orders will set out the publications in which the advertisements are to be placed.

The broker should be required to seek the Marshal's approval of any advertisement before going to press and should supply the Marshal with a copy of all advertisements. An alternative is for the Order to also include the wording and form of advertisement so this can not be changed. This may be a more acceptable to the Auditors although means the Marshal would need to seek orders quickly.
The following is a sample Advertisement for Sale.

[6.11] Foreign currency account

The Marshal should obtain an order to open a foreign currency account with an Australian bank.

The account should be opened in US currency unless it is a type of ship that would be advertised locally. Where the ship is small such as a trawler, cruiser or yacht and it is solely advertised in the South Pacific region an 'at call' account should be opened in Australian dollars. The bank will open the account even though there are no funds to be deposited. The name of the account is "Admiralty Marshal – Sale of the MV (name of the ship)".

The starting point for a foreign investment account in US currency with the Commonwealth Bank of Australia is the Canberra Foreign Investment Branch.

For audit reasons the Marshal is not made a signatory to the account and the usual practice is for the District Registrar or other senior officers to be signatories. It is in the Marshal's and any creditor's interest that there is a limit on the amount that can be drawn without an order of the Court. The best practice would be for money only to be withdrawn on the order of the Court.

Establish a separate set of accounting records in which to record receipts and payments from that account. It is good administrative practice to maintain separate folders for this account to file correspondence with the bank, bank statements and reconciliations statements and accounting records.

[6.12] Conditions of Sale

When the Admiralty Marshal's Conditions of Sale (see Annexure 15) are complete and have been approved they can be provided to the broker to give to prospective purchasers.

[6.13] Inventories

A certified marine surveyor should be engaged to carry out the following inventories and provide reports:

• inventory of stores and equipment (with photographs);
• bunkers and lubes survey to establish quantities and types of fuel and lube oils on board.

The bunker survey is not carried out until 3 days after the sale (in accordance with the Conditions of Sale).

It is preferable to be in receipt of the inventory report before any inspections take place by prospective purchasers.

[6.14] On-board inspections

The Marshal should provide the brokers with an authority to attend the ship at their discretion to obtain plans and to accompany prospective purchasers to conduct an inspection of the ship. The authority should be effective from a specified date and cease on the closing date for bids.

All visitors are required to sign a waiver and indemnity form in accordance with Annexure 17. A copy of the form should be provided to the broker and the Master of the ship.

[6.15] Terminate contracts and request final accounts

The Marshal should formally notify all suppliers and service companies including any employment agency that orders have been made to sell the ship and request that all outstanding accounts be submitted for payment. It is important that the Marshal regularly follows up these accounts.

After bids close

[6.16] Recording the bids

Consult the docket Judge as to the practice to be followed on closure of the bids. The usual practice is that the Marshal, the Marshal's solicitor (if any), District Registrar (or some other senior officer nominated by the District Registrar) and the broker(s) meet in the Registry, in private, to open and formally record details of each bid. It is preferable to keep the envelopes with each bid. Some bids will have been sent by facsimile to the broker who will place them in an envelope.

You may find that a bid is received after the closing time. One or more of the bids may be defective because the bidder has imposed conditions, it is not signed or for some other reason. You should be guided by legal advice in these circumstances.

[6.17] Accepting a bid

After all the bids have been opened the Marshal should open the valuation from the broker.

Where the highest bid or a number of bids are above the valuation and are acceptable bids the usual practice is that the Marshal accepts the highest bid. The docket Judge should be advised of the outcome.

On the Court return date for the acceptance of the tender the Marshal should inform the Court that there are a number of bids above the valuation and that the Marshal proposes to accept the highest bid. If all the bids are below the valuation the Marshal should prepare short minutes of order seeking an order to accept the highest bid (see Annexure 18).

[6.18] Preserving confidentiality on the return date

There are issues as to how much should be said in open Court on the return date given that on that date it is unknown whether or not the highest bidder will proceed to buy the ship.

The brokers strongly recommend that, as the offers are open for 5 business days, the name of the bidders, their offers and the valuation should remain confidential until the sale is completed and the ship is transferred to the purchaser.

In any case, it is the practice of the Marshal never to release details of the bids (offeror or amount) and the valuation, as they are confidential and subject to Court orders.

[6.19] After the return date

The following steps are required to complete the sale:

1. Request that the broker communicate the acceptance to the highest bidder as specified in the offer and reaffirm the payment requirements contained in the Conditions of Sale.

2. Liaise with the bank to check that the 10% deposit has been received and recorded on the bank ledger. The bank should be requested to formally confirm the payment has been received and that they are cleared funds and provide a copy of the ledger by facsimile.

3. Arrange for a bunker survey to be conducted in accordance with the Conditions of Sale.

4. Ascertain the current net spot market price for fuel oil, diesel oil and lubricating oils as detailed in the bunker survey report. Contact the various suppliers of the type of fuel or lubricant and ask for written advice on the price. The price of some lubricants may have to be for an equivalent product that is available here, as the actual type may have been purchased overseas and not available in Australia. All prices should be obtained in Australian dollars so that GST at the rate of 10% can be added to the price per litre. If necessary, the Marshal should convert the amounts to US dollars.

5. The Marshal or his/her solicitor should formally communicate with the authorised representative of the buyer and set out the quantity, type of fuel and lubricant, the price per litre, GST, price per litre inclusive of GST and the total amount for each type that is payable. The letter should include the total sum payable for bunker fuel and unused lubricants in accordance with the Conditions of Sale and also acknowledge receipt of any other payments made. If necessary, the Marshal should convert the total sum payable to US dollars.

6. The Marshal or his/her solicitor should ask the authorised representative of the buyer for a copy of the authority for the agent to act on behalf of the buyer. As most buyers are based overseas the authority will take the form of a 'Notarial Acknowledgement' of that authority.

7. The Marshal or his/her solicitor should prepare a draft Bill of Sale in conformity with the standard form (see Annexure 19 and sample Bill of Sale).

8. The Marshal or his/her solicitor should seek formal confirmation of the buyer's intention in relation to:

• any existing crew;
• when the buyer's crew will be available;
• attendance for execution, notarisation and delivery of the bill of sale;
• the buyer's agreement not to commence any works on the ship until the buyer has taken delivery;
• payment of the sum for bunkers and unused lubricants; and
• the date on which the Marshal's responsibility for the crew and berthing etc ceases – this date would usually be the date of execution, notarisation and delivery.

9. Notify the insurer of the execution, notarisation and delivery arrangements and the date on which the insurance is to terminate, and request a final invoice.

10. Terminate all other service and supply arrangements and request final accounts including berthing and mooring.

11. Terminate any contracts for equipment hire and make arrangements with the Master of the ship to allow collection by the hirer and to obtain a receipt.

12. Notify the following organisations in writing of the sale:

• Manager of Marine Operations/Harbour Master;
• the relevant Port Authority;
• the water police (if previously notified);
• the Collector of Customs;
• the Australian Maritime Safety Authority;
• Transport Security Coordination Centre (Office of Transport Security).

13. Liaise with the bank to verify that funds have been deposited for the balance of the purchase price and the bunkers and lubricants. The bank should be requested to formally confirm the payment and provide a copy of the ledger by facsimile. Delivery of the ship cannot take place until this amount is received and funds are cleared.

[6.20] If the deposit is not received

If payment of the 10% deposit has not been received at close of business on the third day after acceptance then the Marshal should give effect to the terms of the Conditions of Sale and move to accept the second highest bid provided it is higher than the valuation. The docket Judge in any event should be kept informed of the position. If the bid is below the valuation then the matter should be referred to the docket Judge so that the matter can be listed in Court. The Marshal is not permitted to sell the ship below the appraised value without an order from the Court. See Annexure 21 for GST implications.

[6.21] Executing the Bill of Sale

The Marshal should attend for the execution of the Bill of Sale with his/her solicitor or a Registrar with the final form of the Bill of Sale as approved for execution.

After obtaining the signatures, witnessed by the Notary Public, the Marshal should make sufficient copies of the Bill of Sale and the Notary Public's Certification for the Marshal's records.

[6.22] Rule 71

Rule 71 provides that the Marshal shall, as soon as practicable after the sale of the ship or property:

• file a return of sale;
• pay into court the proceeds of sale; and
• file an account of sale and documents in support of the account for taxation.

Return of Sale

A standard form of Return of Sale is at Annexure 20. A copy of the Bill of Sale, Notary Public's certificate and Conditions of Sale must be annexed to the Return of Sale.

The Return of Sale should be prepared before the next directions hearing or within 7 days whichever is the earlier.

It is suggested that the Marshal file and serve the Return of Sale on the parties.

Proceeds of Sale

As the monies are being held in the foreign currency account (opened in accordance with the Court's order) it will be necessary to obtain an order from the Court in the following form dispensing with compliance with Rule 71(b):

The Marshal need not pay the proceeds of sale into Court, but except for payments ordered to be paid out of the proceeds of sale, the Marshal keep the proceeds of sale in United States Dollars in an interest bearing account at the Commonwealth Bank of Australia.

Account of Sale

The account of sale should comprise copies of all invoices for payments made in respect of the sale of the ship together with a statement of the Marshal's costs and expenses, if any.

It is suggested that the Marshal file and serve the Account of Sale on the parties.

[6.23] Poundage

No poundage is payable in respect to a sale under the Admiralty Act.

[6.24] GST on the Sale of Ships

A paper on 'GST as it Relates to Marshal's Costs and Expenses and the Sale of Ships' is set out at Annexure 21. Where a Marshal is selling a ship, the practice set out in that paper should be adopted.

Of particular assistance are the comments on 3(a) Conditions of Sale and 3(b) Export Exemption. However, where a Marshal is selling a ship, the paper should be read in its entirety.

http://www.fedcourt.gov.au/law-and-practice/areas-of-law/admiralty/jurisdiction/marshals_manual/chapter-6

MARSHALS' MANUAL CHAPTER 5: RELEASE

[5.1] The legal framework

Division 3 of Part VI (Rules 51-53) of the Admiralty Rules sets out the rules for the release of a ship or other property.

If the Court or a Registrar orders release of a ship, the Court or Registrar must give the Marshal a notice of the release in accordance with Form 19A and an entered order.

[5.2] The release

Annexure 14 sets out a release checklist that must be completed by the responsible Marshal. A release will involve the following steps:

1. Relinquishing any controls the Marshal has over the ship.

2. Ensuring the warrant, writ and affidavit are removed from the ship.

3. Notifying the following of the release by providing them with a copy of the order:

• the Plaintiff's and owner's solicitors;
• the Ship;
• the Ship's Keeper;
• Transport Security Coordination Centre of the Office of Transport Security;
• Manager of Marine Operations/Harbour Master;
• the relevant Port Authority;
• the water police (if previously notified);
• the Collector of Customs;
• the Australian Maritime Safety Authority;
• OAMPS Gault Armstrong Pty Ltd (see [5.3]).

4. Notifying the people on the distribution list (ie those notified of the arrest) of the release.

5. Notifying the relevant District Registry of the release so that Casetrack may be updated.

6. Update the Admiralty Arrest Register, see [3.24] for further details.

7. Finalise invoices and accounts, including return of any outstanding deposit:

• Sample of Return of Balance of Deposit.

[5.3] Notification of insurer

On release of the ship the section titled 'release of vessel' on the Declaration of Vessel Arrested form (see Annexure 4) should be completed and the entire form retransmitted to OAMPS Gault Armstrong Pty Ltd.

The insurer's contact details are as follows:

Mr Ric Clarke	Phone: (08) 6250 8484 (switch)
OAMPS Gault Armstrong Pty Ltd	Fax: (08) 6250 8494
PO Box 6299
EAST PERTH WA 6892	Email: ric.clarke@oamps.com.au

http://www.fedcourt.gov.au/law-and-practice/areas-of-law/admiralty/jurisdiction/marshals_manual/chapter-5

MARSHALS' MANUAL CHAPTER 4: CUSTODY

Introduction

[4.1] The legal framework

Rules 41, 47, 48, 49, 50, 75A, 75B, 75C, 78 and 78A of the Admiralty Rules are relevant to the custody of the arrested ship or property.

In particular, subrule 47(2) provides that the Marshal shall, unless the court otherwise orders, take all appropriate steps to retain safe custody of, and to preserve, the ship or property, including:

(a) removing from the ship, or storing, cargo that is under arrest;

(b) removing cargo from a ship that is under arrest and storing it;

(c) removing, storing or disposing of perishable goods that are under arrest or are in a ship that is under arrest; and

(d) moving the ship that is under arrest.
The courts have found that the Marshal has a duty to take reasonable care in carrying out their duties in relation to an arrested ship or property (see, for example, Mooloolaba Slipways Pty Ltd v The Owners of the Ship "Santa Maria" & Anor [2001] QSC 470).

[4.2] Application to the Court

Rule 48 provides that the Marshal may at any time apply to the Court for directions with respect to a ship that is under arrest.

This may be done by the Marshal directly, as an officer of the Court, or if considered necessary by a legal representative retained by the Marshal.

Custody of ships and property under arrest

[4.3] Recording the condition of the ship

A photographic record of the condition of the ship and the items on it should be made at the time of the arrest. 

This record may be important in the event that there is any dispute about the condition of the ship or the preservation of property on it.

A record should be made of the following matters (depending on the type of ship and the circumstances of the arrest):

• the ship's dimensions, utilisation and age – this should be available from the ship's Register and survey/classification certificate (the expiry date of which should also be recorded – the Master will often have a list of the certificates and their expiry dates);
• the estimated current market value of the ship (this is part of the information that must be provided to the insurer within 14 days of the arrest and may be obtained from a local ships broker);
• the overall condition of the ship, including whether there are:
• any structural or mechanical problem(s);
  • any leaks, damage, rust, zinc corrodes or other deterioration;
  • whether any repairs or maintenance work have been booked;
• whether anything must be done to the ship if it is going to be laying up for several days;
• the names and nationality of the crew, including a copy of the crew list;
• the medical condition of the crew;
• the amount, condition and relevant expiry dates of the ship's medical supplies;
• the amount of drinking water for the crew;
• the amount and condition of hard and fresh rations on the ship;
• the amount and age of the bunker fuel, and the number of sailing days it will allow;
• the amount of diesel fuel for generators;
• the amount of water and feed for any livestock (if relevant);
• the condition of the sewerage system and when it is next due to be serviced;
• the type and condition of the ship's communications system;
• the condition of any refrigeration system on the ship (if relevant);
• details of any cargo on board, including:
  • the nature and quantity of cargo;
  • the approximate value of the cargo (if known);
  • whether any cargo is perishable;
  • the identity of the owner(s) of the cargo;
  • the destination of the cargo.

A checklist for recording the condition of the ship is Annexure 7 and must be completed by the arresting Marshal.

The Marshal should record the responses given by the Master and/or Chief Engineer against each item on the checklist where relevant, then sign, date and record the time of completion on the checklist. The completed checklist should be countersigned by a Deputy District Registrar for internal control purposes and to meet audit requirements.

Where the Marshal is concerned about some aspect of the ship's condition, or the arrest is to be for a significant period of time, consideration should be given to having the ship inspected by a qualified marine surveyor for the purposes of providing:

• an expert report on the ship's condition; and
• advice on what reasonable steps should be taken to protect and preserve the ship.

[4.4] Mooring the ship

At the time of the arrest the Marshal should assess whether the ship is properly moored. This will include an assessment as to the suitability of the location and type of mooring in terms of safety, weather conditions, proper supervision, maintenance and cost.

At the time of arrest the ship may be at a working berth (this is usually the case for commercial cargo and passenger ships). Early consideration should be given to whether the ship should be moved from a working berth to a more suitable type of mooring. There are several reasons for this:

• working berths often incur very high berthage rates (in excess of $500 per hour);
• if the arrest continues for more than a short period the port facility operator and the harbour authorities will need to have the working berth cleared to accommodate incoming ships;
• access for the Marshal and others to working berths can be problematic, particularly in busy ports where cargo operations are undertaken 24 hours per day, 7 days per week.

Issues that might need to be taken into account when considering the suitability of the current berth or whether to move the ship to another berth include:

• the likely duration of the arrest;
• the suitability, safety etc of the current berth – particularly if the duration of the arrest may be protracted;
• any advice from harbour authorities and the port facility operator regarding the need for the working berth to be freed for other ships;
• the likely costs of any move, including berthage fees;
• the availability of suitable alternative berths;
• whether or not cargo operations are underway or likely to occur during the period of arrest;
• any advice from the Master as to whether the ship needs to be alongside for any repairs or maintenance works scheduled whilst in port;
• the accessibility of any new berth for the Marshal, maintenance workers, provision of victualling supplies, brokers and prospective buyers (in the event of a sale) etc.

When a Marshal is considering whether to move a ship, the harbour authorities can provide advice on the location and cost of other suitable types of berth that may be available.

There are several types of mooring:

• working berth;
• lay-by or lay-up berth;
• buoy;
• dolphin;
• trot;
• anchorage.

The harbour authorities can advise on which type of available berth is most suitable for the type of ship under arrest.
Some harbour authorities or port facility operators still maintain 'lay-by' berths where a ship can be berthed for considerable periods at minimal cost, however these are fast disappearing.

It may be advisable to also consult with the plaintiff via their solicitor in regard to any move of the ship. They may be able to provide informal or 'without prejudice' advice on the likely period of arrest, the likelihood of any application to load or unload cargo and their client's attitude in regard to the costs of such a move.

If the Marshal is considering moving the ship on the Marshal's own motion, it is advisable to ask for a direction from a Judge so that an order can be made that the costs of the move be a part of the Marshal's costs and expenses of arrest.

In circumstances where:

• vessels are arrested other than in major ports; or
• there is a conflict of ownership of a vessel; or
• there is unsatisfactory protection from prevailing weather conditions,

it may be possible to obtain the assistance of the Royal Australian Navy (RAN) where there is a base or facility in close proximity to the arrest location. When assistance is sought from RAN, it is suggested that the RAN facility be considered to be a temporary haven that will allow the Marshal sufficient time to consider all other options in regard to seeking a safe berth or mooring for the vessel.

The RAN, within their general guidelines and policies, have a role to play in assisting general commercial and, more particularly, Federal Government agencies. Arrangements should be made at Commanding Officer or Executive Officer level at the relevant facility.

[4.5] Bringing an arrested ship into port – maritime transport security legislation

In addition to having to have the usual approvals and clearances for entering a port, Part 5 of the Maritime Transport and Offshore Facilities Security Act 2003 provides that a regulated foreign ship may not enter an Australian port unless:

• the ship has:
  • an International Ship Security Certificate (or approved International Ship Security Certificate equivalent) (ISSC) – s 91; and
  • the ship has provided pre-arrival information in accordance with the regulations – s 92; or
• the Secretary has issued a control direction to the ship operator or the Master of the ship allowing the ship to enter the port.

The Marshal should be able to ascertain whether a regulated foreign ship is able to enter a port by contacting the relevant port authority. 

If the ship is not able to enter the port because it does not have an ISSC, has not provided the required pre-arrival information or is not subject to an appropriate control direction, the Marshal should contact the Transport Security Co-ordination Centre of the Office of Transport Security or the relevant State Security Director.

While it is an offence for a regulated Australian ship that is being used for maritime transport to:

• not have a ship security plan;
• not have an ISSC; or
• fail to comply with its ship security plan;

it seems that none of these matters will prevent a ship from entering an Australian port subject to the ship having the other necessary approvals and clearances. 

Nor is it clear from the legislation whether failure by a regulated Australian ship to provide pre-entry information will preclude it from entering an Australian port.

The Marshal should be able to ascertain whether a regulated Australian ship is able to enter a port by contacting the relevant port authority.

[4.6] Other certificates

If the ship is a large ship (that is, a ship other than a yacht, fishing trawler, cruiser etc) then on arrest, or as soon as practicable after an arrest, the Marshal should seek copies of the following certificates:

(1) Certificate of Class – Hull;
(2) Certificate of Class – Machinery;
(3) International Tonnage Certificate;
(4) Certificate of Bareboat Charter Registry;
(5) Statutory Survey notices including:

(i) Load Line Annual Survey Certificate,*
(ii) Safety Equipment Annual Survey Certificate,*
(iii) Radio Certificate,* and
(iv) Radio Renewal Survey Certificate;*

(6) Tank Statement;
(7) Safe Manning Certificate;
(8) Copy of ship's plans.
* These certificates may all be part of one certificate.

[4.7] Quarantine

The Marshal should formally approach the Australian Quarantine and Inspection Service (AQIS) and request that they remove items of quarantine concern from the ship. 

After they have attended the ship, AQIS will formally confirm that the ship is a quarantine risk free ship.

Quarantine issues may arise during the custody of the vessel and may impede the vessel's arrest in certain circumstances. 

Marshals, at the time of the arrest, should ascertain whether there are any animals (such as dogs, birds and the like) on board the vessel as this may immediately raise issues effecting Australia's quarantine laws.

Where there are animals on board the Marshal should:

• execute the warrant on the vessel; and
• obtain copies of any available quarantine certificates in relation to these animals; and
• contact the local AQIS officer to determine whether there is a quarantine risk.

The issue may cause difficulties for the Marshal if the animal is infected in any way. 

It is suggested a cautious approach be adopted when arresting the vessel, for example it may be obvious that a dog is on board the vessel before boarding. This knowledge, together with any other information about the vessel's voyage details, should be taken into consideration at the time of execution of the warrant. 

It is better to involve AQIS officers as early as practicable where animals are seen to be on the vessel.

[4.8] Excise on fuel purchases

In the matter of OW Bunker & Trading Co Ltd A/S v Ship 'Mawashi Al Gasseem' (SAD 146/2005) an issue arose as to whether the Marshal must pay excise duty on bunkers (marine gas oil) ordered by the Marshal. 

The matter was raised at the local level with the Australian Customs Service (ACS) and was subsequently referred to Canberra for a response. 

The response from the Director Cargo Environment, Cargo Branch, ACS, to the Manager, Container Examination Facility/Enforcement Operations, ACS, South Australia was set out in an email entitled: 

"In Confidence: Mawashi Al Gasseem Bunker Query" sent on 12 July 2005 at 14.44. 

The substance of the advice is set out below:

"The short answer is that the nature of the ship, the ongoing purpose of its voyage and the fact that it is not loading/carrying solely domestic cargo indicates that it has not disconnected from its international voyage and therefore revenue should not be charged in the ship's bunkers."

The content of the email is to be used as the authority in such circumstances for the non-payment of excise duty and this should be made clear when ordering bunker supplies. 

It is clear that the authority relates to ships on international voyages only.

[4.9] Insurance claims

Under the terms of the Court's insurance policy the Marshal has a duty to disclose promptly in writing any occurrence (a term which is defined in the policy) that may result in a claim. 

The occurrence may come to the Marshal's attention in a telephone call, an email or an unsigned letter addressed to the Marshal that refers to damage or the conduct of the Marshal or other party that has the potential to cause damage.

Regardless of the Marshal's view of the event, OAMPS Gault Armstrong Pty Ltd should be informed of the event so they in turn can inform the underwriters who may decide to investigate the claim.

Notifying the insurers at the earliest time enables a marine surveyor or insurance assessor appointed by the broker to gather evidence as soon as practicable after the event and to form a view as to liability.

The Marshal must not admit liability nor give any waiver of subrogation without the express permission of the underwriters.


The Marshal has a duty to take such measures as may be reasonable for the purpose of averting or minimising a loss.

The Marshal should keep a detailed account of the particulars of any event that may result in a claim including records of conversation with potential claimants, photographs of damage that record the date and time it was taken, hold any part of the ship that may have been detached from the ship as part of an event (where it is possible) and report such contact to the broker. 

When a claim is under investigation the broker will provide the Marshal with advice as to dealings with the claimant.

Master and crew

[4.10] Persons on board when arrest occurs

If the ship is unattended, the Marshal must be satisfied that it is safely moored.

In the case of a small ship, if there are people on board then the Marshal should direct them to secure the ship to the Marshal's satisfaction. 

In some cases it may be appropriate to direct all or some of the people on board the ship to gather their personal belongings and leave the ship within a reasonable time (as specified by the Marshal).

Whether this is appropriate for other ships will depend on such things as the size of the ship, safe custody, safe manning levels, preservation of the ship and requirements of the local port and other relevant authorities. 

The Marshal will usually appoint a ship-keeper and obtain an undertaking from him or her (see Annexures 8 and 9). 

The Master remains responsible for complying with any obligations under port or navigation legislation and for the crew. 

The Marshal should take care that any instruction given to the Master does not impinge upon those responsibilities.

If there are foreign crew then the Department of Immigration will need to be notified of the arrest.

The Marshal must also give instructions to the Master and any crew remaining on board that any visitors, press, maintenance workers etc can only board the ship with the Marshal's permission.

[4.11] Repatriation of crew

If the Master or any member of the crew is a foreign national or foreign resident and elects to leave the ship or is discharged, that person must be repatriated unless he or she is taking a post on another ship.

Where repatriation is to occur, the Marshal with the assistance of the Master should prepare a schedule of costs of repatriation. 

The schedule should provide for air travel to the nearest home port, any domestic travel and enough cash to enable the crew member to reach home. 

It has been held by the courts that, while in most cases the costs of repatriation are expenses of the arrest, these costs may also be expenses of sale (Patrick Stevedoring No 2 Pty Ltd v Turakina and Waitemata Stevedoring Services Ltd v Rangitata & Ors (1998) 154 ALR 514; 84 FCR 493).

The Marshal should also ascertain whether any member of the crew has personal belongings that cannot be carried out of Australia as plane luggage (for example, in the matter of Patrick Stevedores No 2 Pty Ltd v M V Skulptor Konenkov NG 495 of 1995 it was necessary to have a crew member's second-hand car shipped to Russia by container).

[4.12] Retention of crew

In some ports the Harbour Master requires that a Master and crew be engaged for ships of a certain size. 

The Marshal must consider whether a crew or a ship's keeper are necessary to maintain the ship in good working order, for instance by keeping machinery running (such as pumps and generators). 

Consideration should be given to using a labour hire firm, otherwise it is the Marshal's responsibility to make wages, tax and superannuation payments and to arrange any applicable insurance cover. Alternatively, the Marshal can ask the plaintiff to retain a crew. 

The advantage of the latter is that the Marshal does not have to outlay any moneys for wages or be responsible for tax, superannuation and insurance. In such cases the plaintiff will usually seek an order from the Court that money paid for the crew be recoverable as part of the Marshal's expenses of arrest.

The Marshal must ensure that the Harbour Master, the plaintiff, the water police and other interested parties are kept informed of arrangements concerning the crew of the ship.

[4.13] Application for removal (discharge) of cargo

Rule 49 provides that, if a ship is under arrest but its cargo is not, a person who is entitled to immediate possession of the cargo may apply, in accordance with Form 17 Application for discharge, to the Marshal to discharge the cargo from the ship.

A copy of Form 17 is Annexure 10.

The Marshal may comply with an application to discharge the cargo if:

• the Marshal is satisfied that the applicant is entitled to immediate possession of the cargo;
• the applicant gives an undertaking in writing that is satisfactory to the Marshal to pay on demand to the Marshal the costs and expenses of the Marshal in connection with the discharge; and
• if the Marshal so requires, the applicant indemnifies the Marshal, in a form satisfactory to the Marshal, in respect of any claim against the Marshal arising from the discharge.

A precedent undertaking and indemnity is Annexure 11.

A checklist for dealing with the discharge of cargo is Annexure 12 and should be completed by the arresting Marshal.

Issues to be considered on an application to discharge the cargo include:

• whether there are suitable cargo handling facilities at the berth;
• whether the ship will have to be moved to a working berth;
• whether there are any hazardous or dangerous goods included in the cargo to be discharged – in this case consult with AMSA;
• whether the cargo is under arrest – in this case suitable arrangements will need to be made for the secure custody of the cargo once discharged from the ship;
• whether the ship's Master and crew will co-operate with cargo operations – this can be a particular issue where the background to the arrest includes any dispute over the payment (or non-payment) of crew wages or entitlements;
• whether the parties are nearing settlement of the dispute and the ship could be released from arrest shortly;
• whether a party will make an application for sale of the ship – in these circumstances all the cargo on the ship will need to be removed and the respective cargo interests should make an application to the Court so that costs, ship movements and cargo discharge arrangements can be directed or ordered by the Court.

Notwithstanding that the Marshal may rely on the applicant's undertaking in relation to the costs of the discharge, it is often preferable that an agreement be reached with the applicant that they make the logistical arrangements for the discharge and pay the associated costs directly.

If the Marshal decides to discharge the cargo he or she should notify the following organisations that permission has been given to berth for discharge of cargo so that clearance and facilities may be given:

• Manager of Marine Operations/Harbour Master;
• the relevant Port Authority;
• the water police;
• the Collector of Customs.

[4.14] Repairs

Repairs to the ship should be classified as either minor or major repairs. Minor repairs should be considered as being part of the normal on-going, in port repairs that can be carried out by the crew, by the ship's engineers or under their supervision. To affect this class of repair equipment, hardware, tools and other materials and supplies may need to be ordered by the Marshal. As an example a special piece of equipment may need to be manufactured on shore to keep the ship's generators working to be fitted by the ship's engineers. There may also be a need to engage a chemical consultant to advise on the chemicals needed to flush the ship's salt water-cooling and piping system in circumstances where the vessel has been under arrest for months.
The Marshal should make it clear to the Master of the ship that under no circumstances should oxyacetylene gas torches be used for repairs without the Marshal's express approval. Such work may require a 'hot work permit' from the Harbour Master or the Port Authority. The Master of the ship would usually make such arrangements with the relevant authority where the Marshal is satisfied that such work can proceed.

Major repairs include those where contractors need to be engaged to remove and repair bulk heads or hatch covers or other repairs that involve the use of oxyacetylene torches and heavy lift equipment.

After categorising repairs as minor or major, the Marshal should then determine whether he or she is prepared to allow the repairs to be undertaken. When making this determination, the Marshal should assess:

• the relative risk to the ship and its crew.;
• whether the repairs are necessary to maintain the safety, condition or value of the ship or its equipment;
• whether the ship's Master or agent will bear the cost of the repairs or whether they can be justified as part of the Marshal's expenses of arrest – this can be a particular issue where there is no local agent for the ship and/or the Master does not have access to funds, either directly or through the operator/owner.

Where the repairs are categorised as major repairs, the Marshal should not permit them to proceed. The owner/operator or their agent should apply to the Court for an order that would include the party providing an indemnity and undertaking to protect the Marshal.

This above approach should be adopted regardless of whether it is the ship's agent or Master seeking to arrange repairs or maintenance on a ship whilst it is under arrest or the repairs were booked by the Master or operator before the ship was arrested. The Marshal should assess the relative risks and may have to visit the ship to examine the repair work to be undertaken. 

The Marshal should also ask the local AMSA inspector to attend the ship with him/her to explain how the repair work would be undertaken and the risks associated with it. Details of any expected repairs or maintenance work should be obtained from the Master and/or agent at the time of arrest.
If there is any doubt about the necessity for the repairs or the appropriate source of responsibility for payment then the Marshal should give the plaintiff an opportunity to express a view regarding their inclusion as part of the expenses of arrest. Where the costs are likely to be significant and/or the plaintiff has any objections then the matter can be brought before the Court for directions.
In any case the Marshal should keep a close and detailed record in the arrest log of the request, the nature and extent of the repairs, the costs and the content of discussions with the various parties.

Where the cost of repairs is part of the expenses of arrest then the Marshal should be particularly careful to obtain an appropriate number of independent quotations prior to approving the work.

[4.15] Moving the ship

There are a large number of circumstances where it may become necessary to consider moving a ship that is under arrest. Some of the most common are:

• where the arrested ship is at a berth that is unsuitable for a longer term stay;
• where the arrested ship is at a working berth and port operators or authorities require the use of the berth for other incoming ships;
• where the berthage costs are high and the costs of arrest need to be kept to a reasonable level;
• where the ship is at anchor or at a non working berth and needs to be berthed at a working berth for taking on fuel and/or provisions;
• where an order for sale has been made by the Court and the berth is unsuitable for the conduct of the sale or inspections by prospective buyers;
• where the ship is not at a working berth and needs to be taken to a working berth to undertake cargo operations (this may involve two moves – one to the working berth and one back to the original berth or to anchor).

Rule 47(2)(d) provides the Marshal must take all steps to retain safe custody of, and to preserve, the ship or property, including moving the ship that is under arrest. An application can be made to the Court by the Marshal or a party for the ship to be moved.

Co-operation of the Master and crew should be confirmed prior to making any arrangements for the move.

The cost of moving a ship, even a relatively short distance, can be substantial and may include:

• pilotage fees;
• channel clearance fees;
• tugs;
• line handling charges.

Prior to making arrangements to move a ship the Marshal should ensure that the responsibility for costs is clear. This can be done by seeking a direction from the Court that the costs form part of the costs and expenses of arrest or are to be met by a particular party, or by obtaining an undertaking from the interested party to pay the costs associated with the move.

Where the move is being undertaken at the formal request of one of the parties it may be preferable that the Marshal come to an agreement that that party make all the arrangements for the move (subject to the satisfaction of the Marshal) and pay all costs directly.

In these circumstances an appropriate indemnity should be obtained from the party concerned.

If the Marshal is making the arrangements for the move at the request of one of the parties (other than the plaintiff) then a separate set of detailed accounts should be kept of all associated costs. 

At the appropriate time a demand for funds should be made, and a statement of accounts provided, to the relevant party.

Where the Marshal is making the arrangements for the move and will be paying the costs, it will be necessary to obtain quotations for the relevant services. 

If the ship operator has an ongoing arrangement with a particular tug and mooring service provider then they may be used. Copies of quotations and costs of using existing service arrangements should be obtained and held with the Marshal's records.

Where the Harbour Master requests the Marshal to move a ship from a berth the Marshal should request a letter setting out the reasons for the move and giving details of the other ships that require access to that berth and their estimates time of arrival and length of stay. A copy of the letter should be provided to all parties in the proceeding seeking their consent to the movement of the ship. These responses will form the basis for obtaining an order of the Court to move the ship.

Depending on the circumstances of the move (its location, timing etc), it is generally preferable for the Marshal or a nominated officer to be present on the ship during the move.

The Marshal should provide details of any move (including the fact that the move is authorised by the Marshal) to the following organisations:

• Manager of Marine Operations/Harbour Master;
• the relevant Port Authority;
• the water police;
• the Collector of Customs;
• the Transport Security Coordination Centre of the Office of Transport Security;
• the Australian Maritime Safety Authority.

The Master of the ship should be clearly advised that the moving of the ship in no way constitutes either a change in the arrested status of the ship or a release from arrest.

In very rare circumstances it is necessary that a ship under arrest be moved from one port to another. 

In these circumstances the Marshal should consult with the docket Judge and the parties to ensure that the orders in relation to the move are sufficiently detailed so as to cover all issues involved in the move. 

A Deputy Registrar (Admiralty and Maritime) may also be consulted. The Marshal may need to consider obtaining legal advice and may seek to be heard during the hearing of any application in this regard. 

The Marshal should obtain appropriate indemnities and undertakings to ensure the costs of the move are fully funded prior to the move taking place. 

The insurer OAMPS Gault Armstrong Pty Ltd should also be informed of any such proposal. 

While the Court's insurance policy provides for the movement of vessels in excess of 100 miles between ports and places in Australia the cover is subject to terms and premium rates to be agreed.

Annexure 13 sets out a movement checklist.

Maritime security

[4.16] Ensuring compliance with ship security plans, security directions etc

The maritime transport security legislation imposes a number of obligations upon ship operators and Masters of security regulated ships. These obligations remain in force while the ship is in the custody of the Marshal.

For example, the ship operator and Master of a regulated Australian ship are responsible for ensuring that:

• there is compliance with a direction to implement or comply with additional security measures (section 33);
• the ship is operated in accordance with the ship's security plan (section 63);
• operation of the ship does not hinder or obstruct compliance with the ship security plan of another ship (section 64);
• any maritime transport or offshore facility security incident is reported to the relevant authorities as soon as possible (sections 178 and 179);
• there is compliance with a ship enforcement order (section 195).

This list is not exhaustive.
Where the Master and/or crew of an arrested Australian ship have been repatriated, the ship operator continues to be responsible for the ship security plan and must provide any caretaker Master and crew with a copy of the plan and any other information and resources needed to implement it.
The ship operator and Master of a regulated foreign ship are responsible for ensuring that:

• the ship implements applicable International Ship and Port Facility Security (ISPS) Code measures (section 94);
• the operations of the ship do not hinder or obstruct compliance with the maritime security plan of a maritime industry participant or the ship security plan of a regulated Australian ship or the offshore security plan of an offshore industry participant in a way that compromises the security of the operations of the participant or the regulated Australian ship (section 97);
• there is compliance with a control direction requiring the ship operator or Master to take specified action, or refrain from taking specified action, in relation to the ship (section 99);
• any maritime transport or offshore facility security incident is reported to the relevant authorities as soon as possible (sections 178 and 179).

This list is not exhaustive.

The information sheet 'Continuing Obligations of Ship Operators and Masters of Arrested Vessels under the Maritime Transport and Offshore Facilities Security Act 2003' may be provided to relevant personnel. A copy of the information sheet is annexed to Annexure 1B and is also available from the Court's web site.

http://www.fedcourt.gov.au/law-and-practice/areas-of-law/admiralty/jurisdiction/marshals_manual/chapter-4