Donald Pickering & Sons Enterprises Ltd v Karim's Ltd [1997] FJHC 21; HBG0002j.1996s (6 February 1997)

Fiji Islands - Donald Pickering & Sons Enterprises Ltd v Karim's Ltd - Pacific Law Materials

IN THE HIGH COURT OF FIJI

At Suva

Admiralty Jurisdiction

ADMIRALTY ACTION NO. 0002 OF 1996

BETWEEN:

1. DONALD PICKERING & SONS ENTERPRISES LIMITED
trading as UNITED ENGINEERS
2. UNITED MARINE (SOUTH PACIFIC) LIMITED
Plaintiffs

AND:

1. KARIM'S LIMITED
2. the vessel 'BAINIVUALIKU' (aka ZUBI)
3. the vessel 'SENIBIYAU'
Defendants

Mr. ward for the Plaintiffs
Mr. K. Buksh for the Defendants

JUDGMENT

On the 23rd of January 1996 upon the ex-parte application of the plaintiffs this Court issued two (2) warrants for the arrest of two (2) vessels namely, the "Bainivalu" (aka Zubi) and the "Senibiyau" belonging to the defendant company.

The plaintiffs are ship repairers and marine engineers who claim to be owed by the first defendant company various sums totally in excess of $39,000 for repairs, maintenance and interior works carried out on the (2) vessels including various items and fittings supplied to the vessels at the request of the owners representative, Mr. Karim Buksh. In essence the plaintiff's claim is for monies due and owing to the plaintiffs for various works performed and goods supplied by the plaintiffs to the defendant's two vessels and which despite numerous demands remained unpaid at the date of the Writ, namely, 23rd January 1996.

On the 24th of January 1996 the vessels were duly arrested by a Court Officer pursuant to warrants issued by the Court. On 5th February 1996 the owner of the vessels acknowledged service of the Writ and on the 6th of February 1996 the defendant company issued a Motion seeking the discharge of the arrest warrants. Subsequently similar Motions were issued by the defendants on the 20th March 1996 and 19th August 1996.

On 28th August 1996 written submissions were ordered by the Deputy Registrar and these were eventually completed on 29th October 1996.

The defendant's submission is concisely summarised in the following first paragraph where it states:

"The applicant's submission is simple. The plaintiffs have no lawful right upon which such arrest could be founded. The arrest (of the vessels) was therefore wrong in law."

More particularly, the defendants submit that:

"... in this particular case the right to arrest must be based on a maritime lien (of which) our laws ... recognises only 6 categories of claims which give rise to such a lien:

(1) Salvage;

(2) Collision;

(3) Seaman's wages;

(4) Bottomry;

(5) Master's wages;

(6) Master's disbursements;"

and finally, the defendants submit:

"The alleged claim for engineering works (whatever they may be) cannot create a maritime lien; The Halcyon Isle. The plaintiffs had at best, only contractual claims with no proprietary rights in the vessel."

The plaintiffs for its part in seeking to sustain the arrest warrants makes the distinction in its submissions between:

"The action in rem with service of the Writ on the ship ... (and) the arrest of a ship: Service of a writ does not effect an arrest."

Needless to say counsel for the plaintiffs was constrained to submit (that):

"The modern provisions for ship arrest are not to be confused with the rules establishing jurisdiction in an in rem action nor with the law concerning maritime liens."

and the submission concludes:

"The plaintiff does not claim a lien. The plaintiffs right to an arrest warrant arises as a regular incident of Admiralty procedures in an in rem action."

I am indeed grateful for the comprehensive and helpful written submissions that were filed by both parties.

The propositions advanced by the parties is quite simply stated but the resolution of the issue involves an examination of the nature and origins of an admiralty action 'in rem' and the court's jurisdiction to issue a warrant for the arrest of 'the res'.

I begin by referring to a submission of counsel for the plaintiffs that the defence submission cites no authority for the proposition '... the right to arrest must be based on a maritime lien'. In this regard the judgment of the Privy Council delivered by Sir John Jervis in Harmer v. Bell (sub.nom. the "Bold Buccleugh") (1850) 83 R.R. 43 contains the following 'authoritative' statement at p.55:

"A maritime lien is the foundation of the proceedings in rem, a process to make perfect a right inchoate from the moment the lien attaches; and whilst it must be admitted that where such a lien exists, a proceeding in rem may be had, it will be found to be equally true, that in all cases where a proceeding in rem is the proper course, there a maritime lien exists, which gives a privilege or claim upon the thing, to be carried into effect by legal process. The claim or privilege travels with the thing, into whosoever possession it may come."

(my underlining)

and later at p.56 the learned judge said:

"This rule, which is simple and intelligible is, in our opinion, applicable to all cases."

Thirty (30) years later in 1885, Fry L.J. delivering the judgment of the Court of Appeal in "The Heinrich Bjorn" [1885] UKLawRpPro 10; (1885) 10 P.D. 44 said of the jurisdiction of the Court of Admiralty granted by an Act of 1840 (an early predecessor to the Administration of Justice Act 1956):

"... it must be exercised in the manner familiar to the Court of Admiralty and to all courts regulated by the civil law, either by the arrest of the person of the defendant if within the realm, or by the arrest of any personal property of the defendant within the realm, whether the ship in question or any other chattel, or by proceedings against the real property of the defendant within the realm."

Then in answering the question:

"But if the material man may thus arrest the property to enforce his claim, how does his claim differ from a maritime lien?"

his lordship said at p.54 (ibid):

"The answer is, that a maritime lien arises the moment the event occurs which creates it; the proceeding in rem which perfects the inchoate right relates back to the period when it first attached: ... and the arrest can extend only to the ship subject to the lien. But, on the contrary, the arrest of a vessel under the statute is only one of several possible alternative proceedings ad fundandam jurisdictionem; no right in the ship or against the ship is created at any time before the arrest; ... it is available only against the property of the person who owes the debt ...; The two proceedings, therefore, though approaching one another in form, are different in substance; in the one case the arrest is to give effect to a pre-existent lien, in the other, the arrest is only one of several alternative modes of procedure, ..."

Lord Watson in the House of Lords in affirming the above judgment in [1886] UKLawRpAC 19; (1886) 11 A.C. 270 described an admiralty action 'in rem' at p.276/277 as being:

"... a proceeding directed against a ship ... in which the plaintiff seeks either to have the res adjudged to him in property or possession, or to have it sold, under the authority of the Court, and the proceeds or part thereof adjudged to him in satisfaction of his pecuniary claim. The remedy is obviously an appropriate one in the case of a plaintiff who has ... a real interest in the ship or a claim or debt secured by a lien which the law recognises. We have been informed that under the recent practice of the Admiralty Court the remedy is also given to creditors of the shipowner for maritime debts which are not secured by lien; and in that case the attachment of the ship, by process of the Court, has the effect of giving the creditor a legal nexus over the proprietary interest of his debtor, as from the date of the attachment."

Without in any way doubting the above 'practice' his lordship then states:

"The position of a creditor with a proper maritime lien differs from that of a creditor in an unsecured claim in this respect, - that the former, ... can proceed against the ship notwithstanding any change in her ownership, whereas the latter cannot have an action in rem unless at the time of its institution the res is the property of the debtor."

For his part Lord Fitzgerald criticised as "... shewen to be not well founded" the proposition (1) "that there was no proceeding in rem in the Admiralty Court save where there was a maritime lien" and (2) "that there was no procedure in that Court to found jurisdiction except where there was a maritime lien" and his lordship concluded at p.286 (ibid):

"It must now be taken as established that prior to 1840 the Court of Admiralty did exercise a jurisdiction in rem for the purpose of enforcing a claim against the owner though there was no maritime lien, and also in personam, in proper cases."

This right of an unsecured creditor to arrest a ship in an admiralty action 'in rem' was further refined in the judgment of the Court of Appeal in "The Beldis" (1936) 53 Lloyds Law Reps. 255 where it was:

"Held: ... that an action in rem (unsupported by a maritime lien) could not be directed against property of the defendant other than that in respect of which the cause of action arose."

In that case the judgment of Scott L.J. is particularly instructive on the historical development of the jurisdiction of the Admiralty Court in an action 'in rem'. His lordship also traces the 'historical misconception' amongst early 19th Century Admiralty practitioners (and here I would include the defendant): ... that the ambit of the admiralty procedure in rem was co-terminus with the ambit of the maritime lien; that where there was a maritime lien the right to proceed in rem existed, and where there was no maritime lien the right to proceed in rem did not exist." This widely held belief was subsequently considered in "The Heinrich Bjorn" (op.cit) and "finally negatived as wholly erroneous".

It is also useful to refer to the judgment of Lord Esher M.R. in "The Cella" (1989) 13 P.D.82 which like the present case, involved an action 'in rem' instituted by ship-repairers for sums due for repairs done on a ship.

The learned Master of the Rolls in recognising the legitimacy of the arrest of the ship by the ship repairers despite the absence of a maritime lien, said at p.86:

"It is true that in respect of the repairs done by the plaintiff there was no maritime lien, but the Admiralty Division, nevertheless has jurisdiction over such a claim as this, and ... that jurisdiction may be exercised by proceeding in rem, as was done in this case. As regards a maritime lien the Admiralty Court, ... enforces it in an action in rem by seizing the ship and it does so in order to enable the person who alleges he has a right against the ship to realise that right. Now the jurisdiction given to the Admiralty Division by the Act in question can, as I have said, he exercised by an action in rem, that is to say, upon the production of a proper affidavit, a warrant of arrest is issued and under it the marshal may seize the ship, and the Court will adjudicate upon it. Possession is taken by the marshal in order that the ship may be sold, and that the right of the plaintiff may be satisfied out of the ship. These rights must exist before the ship is seized for the Court adjudicates upon the ship on the ground that it had jurisdiction to seize it and realise it for the plaintiff, on account of something which happened before the seizure, which in this case was repairing her."

Finally on this aspect reference may be made to the judgment of the Court of Appeal in "The Banco" (1971) 1 Lloyds Law Reps. 49 which post-dates the passing of the Administration of Justice Act 1956 (Imp) which Act contains the statutory admiralty jurisdiction of the High Court of Fiji (See: "The M.V. Voseleai" Admiralty Action No. 6 of 1994).

In it's judgment the Court of Appeal held that the provisions of Section 3(4) of the Administration of Justice Act 1956 served to extend the scope of the Admiralty court's jurisdiction in an action 'in rem' to not only 'the offending ship' in respect of which the plaintiffs' cause of action arose but also 'any other ship in the same ownership'.

In this case it is common ground that at all relevant times both arrested ships were beneficially owned by the first defendant company which had requested the various works and items supplied by the plaintiff companies to the vessels i.e. 'the res' was and is 'the property of the debtor' and further, that the monies owed by the debtor relates to 'maritime debts' which although undoubtedly incapable of giving rise to a maritime lien (See: Bankers Trust v. Todd Shipyard (1980) 3 ALL E.R. 197 per Salmon and Scarman L.JJ. at p.211j), nevertheless, I am satisfied from the above dicta that the plaintiffs' action is not only competent but that the Court has the necessary jurisdiction and power to issue warrants for the arrest of both vessels in an action 'in rem' despite the non-existence of a maritime lien.

If I should be wrong however, in the above analysis of the historical origins and ambit of the Admiralty, Courts jurisdiction to arrest a vessel in an action 'in rem' unsupported by a maritime lien, then the relevant provisions of the Administration of Justice Act 1956 (Imp) as applied to the High Court of Fiji puts paid to the defendant's submission as to the Court's jurisdiction.

In this regard Section 1(1) of the Administration of Justice Act 1956 provides (as modified):

"The Admiralty Jurisdiction of the High Court of Fiji shall be as follows, that is to say, jurisdiction to hear and determine any of the following ... claims-

(m) any claim in respect of goods or materials supplied to a ship for her operation or maintenance;

(n) any claim in respect of the construction, repair or equipment of a ship or dock charges or dues;"

Plainly in my view the plaintiff company's claims in the absence of any serious challenge to their nature, falls fairly and squarely within the above paragraphs, especially '(n)', and having been incurred in respect of the defendant company's vessels, represents, in my view 'maritime debts' properly brought within the purview of the Courts admiralty jurisdiction.

As for the form or mode in which such claims may be brought or taken by the plaintiff, Section 3(4) of the Administration of Justice Act 1956 relevantly provides:

"In the case of any such claim as is mentioned in paragraphs (d) to (r) of Subsection (1) of section one of the Act, being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner ... of, or in possession, or in control of, the ship, the Admiralty Jurisdiction of the High Court ... may (whether the claim gives rise to a maritime lien on the ship or not) be invoked by an action in rem against-

(a) That ship, if at the time when the action is brought it is beneficially owned as respects all the shares therein by that person;"

(my underlining)

Willmer J. in the "St Elefterio" (1957) 1 Lloyds Law Rep. 283 speaking of the above subsection in an action brought where no maritime lien arose, said at p.287:

"... that subsection, ..., is a subsection introduced for the purpose of enlarging the Admiralty jurisdiction of the Court. ... In my judgment the purpose of the words 'the person who would be liable on the claim in an action in personam' is to identify the person or persons whose ship or ships may be arrested in relation to this new right ... of arresting a sister ship ... This action might or might not succeed if it were brought in personam; But ... in the absence of any suggestion that the action is a frivolous or vexatious action, I am satisfied that the plaintiffs are entitled to bring it and to have it tried, and that, whether or not their claim turns out to be a good one, they are entitled to assert that claim by proceeding in rem."

(my underlining)

(See: also the instructive judgment of Brandon J. in "The Monica S" (1967) 2 Lloyds Law Reps. 113 esp. at pp.118 to 131)

More recently Hobhouse L.J. in discussing the relationship between the Admiralty jurisdiction 'in rem' and 'in personam' and in recognising the tripartite basis upon which an action 'in rem' could be founded said in "The Anna H" (1995) 1 Lloyds Law Reps 11 at p.19:

"The right being enforced in an action in rem is a right against the res. It may be a proprietary right; it may be a maritime lien ...; or it may be an analogous 'statutory' lien where the ownership of the vessel at the time of the issue of the writ is relevant."

From the foregoing analysis I am satisfied that this Court following the jurisdiction of the old Court of Admiralty, has not only the jurisdiction to arrest a ship in an action 'in rem' without the support of a maritime lien and with the object of making the defendant put up bail or provide a fund for securing compliance with any judgment that the court may give against him; but further, that this Court has a statutory jurisdiction pursuant to the Administration of Justice Act 1956 (Imp) to entertain any action 'in rem' and to arrest a ship without there being a maritime lien, where the owner of the ship would have been liable had the claim been brought 'in personam' and where such claim falls within any of the several categories enumerated in Section 3(4) of the Act.

The defendant's motion is plainly predicated upon a fundamental misconception of this Court's Admiralty jurisdiction, both ancient and statutory, to arrest 'the res' in an action 'in rem' and accordingly is dismissed with costs to the plaintiffs.

D.V. Fatiaki
JUDGE

At Suva,
6th February, 1997.

Hbg0002j.96s