Best v The Owner of the Ship 'Glenelg' (No. 2) [1982] VULawRp 2; [1980-1994] Van LR 48 (14 July 1982)

[1980-1994] Van LR 48

IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU

Appeal Case No. 1/1982

BETWEEN:

ADRIAN BEST
First Appellant

AND:

JAMES BEST
Second Appellant

AND:

ERNEST SYDNEY BEST
Third Appellant

THE OWNER OF THE SHIP "GLENELG"
Respondent

[No. 2]

Coram: The Honourable Mr Justice F. Daly
The Honourable Mr Justice J. Williams
Miss J. Walsh, Chief Registrar

JUDGMENT

[ADMIRALTY - PRACTICE AND PROCEDURE - appeal against order to strike out pleading - INJUNCTIONS - interlocutory - Mareva]

This is an appeal from final Orders made by Coakley J. on the 4th of June 1982 by which he struck out three writs of summons in these consolidated actions and discharged an interim injunction.

The actions were commenced on the 14th of August 1980 by writ of summons. In civil case no. 27 of 1980 the writ is headed:

"Admiralty action in rem against the ship "GLENELG" and the Plaintiff is Adrian Best and the Defendant is "The Owner of the ship "Glenelg"".

The writ is in the approved form for a writ in admiralty jurisdiction and the Endorsement reads:

"The Plaintiff claims for wages due to him as a member of the crew on board the ship "GLENELG" from 8th June 1979 until the 4th of January 1980 amounting to A$6,886.90."

Particulars of the amount claimed follow. The plaintiff in that action and two others also claiming in similar terms as members of the crew of the Glenelg are the appellants in this Court.

The facts which I now relate are common to all three claims. On the same date (the 14th August 1980) a warrant of arrest was issued against the ship "GLENELG" ("the ship") although there is some doubt as to whether the arrest was effected as, although the ship was then in the waters of Vanuatu and remained here for some time, it appears from the affidavits to have continued to be in the control of the servants of the owners.

On 10th September 1980, an appearance was entered on behalf of "The owners and other persons interested in the vessel Glenelg."

A defence was filed on the 1st August 1981 on behalf of Glenelg Limited stated to be the owner of the ship. Under the description the owner of the ship "Glenelg" Glenelg Limited is the respondent in this appeal. Shortly, the defence denied knowledge of the plaintiff or his proper remuneration and asserted that the proper defendants were those having possession or control of the ship at the relevant time, naming a number of possibilities. On the 14th August 1981 the warrant of arrest expired without attempt to renew it.

On 14th December 1981 the ship was removed from Vanuatu waters and subsequently became a total wreck on the coast of Noumea. It was then sold by the respondent for a nominal sum to a person willing to take steps to prevent pollution from oil spill from the ship's fuel tanks.

However the respondent has received substantial sums in this jurisdiction as a result of an insurance policy taken out by it on the ship.

The plaintiff, being unable to act fruitfully against the ship itself, sought to act against the insurance monies. On the 21st May 1982 Orders were sought in the Supreme Court to restrain the respondent from disposing of it's assets before final judgment and to require the respondent to pay into Court the amounts claimed in the actions out of the proceeds of the insurance claims.

These orders were resisted and after a sequence of interim orders the matter was heard by Coakley J. on 31st May 1982, judgment being given on 4th June 1982.

Some time was spent on a discussion of the nature of the orders to be made to prevent disposal of the insurance monies and a Mareva injunction was canvassed. We are no longer concerned with this discussion due to arrangements the parties have now reached, although perhaps I should observe that Order 53 Rule 2 of the Supreme Court (Civil Procedure) Rules, 1964 would seem to provide a procedure appropriate to the circumstances in which a Mareva injunction is regarded as appropriate elsewhere.

As I have indicated the learned Judge accepted an argument that the writs should be struck out under Order 27 Rule 4 and it is the basis upon which he did so which is the subject of this appeal.

The argument advanced by the respondent is, that as the writs which commenced this action were writs in rem and the res, that is the ship, has now dwindled to a valueless object outside the jurisdiction, there is nothing left over which the Supreme Court can exercise any jurisdiction. There is, says the respondent, no question of the writ continuing against it in personam as that continuation would do violence to the form and nature of the action before the Court and must be based upon an entirely different form of liability in contrast to the liability originally deriving from a maritime lien.

It is perhaps worth considering the power under which the Learned Judge acted in striking out the writs. This is contained in Order 27 Rule 4 which reads:

4. "The Court may order any pleading to be struck out, on the ground that it discloses no reasonable cause of action or answer, and in any such case or in case of the action or defence being shown by the pleadings to be frivolous or vexatious, the Court may order the action to be stayed or dismissed, or judgment to be entered accordingly, as may be just."

Thus the Learned Judge must have reached the conclusion that the writs "disclosed no reasonable cause of action" as this is the only part of the rule which enables a striking out order to be made. With the utmost respect it cannot be said, in my judgment, that these writs "disclosed no reasonable cause of action".

The cause of action in this case is a failure to pay wages alleged to be due, of sea men who served on the ship. The action lies against the ship by virtue of the well established maritime lien arising in relation to the wages due to sea men serving on board and also lies against any person contractually bound to pay such wages.

Counsel for the respondent concedes that when the vessel was in Vanuatu waters a perfectly reasonable and, indeed, irresistible cause of action was disclosed on the basis of that maritime lien. The fact that the vessel has left Vanuatu waters cannot make that cause of action less reasonable as it is well established that a lien over the vessel travels with her and that the Courts in exercise of admiralty jurisdiction will act against a ship outside their jurisdiction provided it has been duly served within the jurisdiction (see The Nautik (1895) P.121).

The further fact that the ship has been wrecked effects, of course the enforceability and value of any judgment which may in due course be given, but cannot be said to effect the cause of action itself, which as I have stated, continues to exist wherever the vessel is and whatever condition she is in.

On this basis alone, in my judgment, the appeal against the striking out order is bound to succeed as I would conclude that it was not open to the Learned Judge to strike out these writs under Order 27 Rule 4 as the writs continue, despite supervening events, to disclose a reasonable cause of action against what is left of the ship.

But that is not an end to the matter as there is also the question of the continuation of the endeavours by the appellants to pursue the insurance monies. It is in this respect that one must consider the enforcement of the cause of action against those liable in contract to the appellants. It is said that the respondent is so liable by the appellants.

I accept that there is an issue upon whether or not it is in fact so liable but the question before us is, can the writs in civil case nos. 27, 28 and 29 be used to pursue the respondent in relation to such alleged liability?

This is of course, a liability in personam.

The writs, it will be recalled, are all headed "Admiralty actions in rem. However the "Owner of the ship Glenelg" is named as a party indicating, to my mind, that an order is to be sought against such persons.

The Endorsements on the writs also make clear that the action is brought in contract. The respondent has appeared to those writs and entered a Defence. If judgment were given for the appellants in these actions it would commence by a condemnation of the respondent in the amount of the judgment. These matters indicate that there is, in any event, a strong in personam element in the action in rem.

Counsel for the appellants has taken us very carefully and fully through the authorities which he says support the proposition that once a party has appeared to a writ expressed to be "in rem" the proceedings continue against that party as if they were proceedings "in personam".

I hope counsel will forgive me if I do not review at length the authorities which he has kindly cited to us. It seems to me that they are overwhelming. To refer to two only:

In The Banco (1971) 1 All E.R. 524, a case in the Court of Appeal for England and Wales, Lord Denning M.R. said at page 531:

"If the defendant entered an appearance, the action in rem proceeds just as an action in personam. If judgment is entered against the defendant, it can be executed against any of his property within the jurisdiction, be it his ship or any other goods. A writ of fieri facias, or other writ of execution can be issued against the property but only after judgment has been obtained. See The Dictator, The Gemma and The Dupleix".

In Caltex Oil - (Australia) Pty Limited -v- Dredge Willemstad ( [1976] HCA 65; 1975) 136 C.L.R. 529Gibbs J. (as he then was) of the High Court of Australia, said at page 538:

"An action in rem is an action against the ship itself: see Aichorn & Co. KG -v- The Ship Talabot [1974] HCA 21; (1974) 132 C.L.R. 449 at pages 455-456.
However, when the defendants to such an action have entered an appearance, judgment may be enforced against them personally and to the full extent of the damages proved, even though theses damages exceed the value of the ship: The Dictator : The Gemma : The Dupleix : The Banco.
After appearances have been entered the action proceeds as if it were an action in personam although it does not cease to be an action in rem: The Boadmayne: The Banco: The Conoco Britania."

When two eminently distinguished Judges express themselves on a point of law with such firmness it would be a bold man who would venture to disagree. I am pleased to be able to say that having read the authorities referred to I have no hesitation in respectfully agreeing with the conclusions reached by the Learned Master of the Rolls and the present Chief Justice of the High Court of Australia.

It follows that even though these actions were commenced as an action in rem, the entry of appearance by the respondent enables the appellants to continue the actions against the respondent as if they were actions in personam. The appellants therefore disclose in the writs a reasonable cause of action against the respondent in personam and on this ground too, in my judgment, the appeal against the striking out of those writs under Order 27 Rule 4 must succeed.

In so far as the interim orders are concerned as, if the appellants succeed in establishing personal liability on the part of the respondent they will be entitled to proceed against any of the assets of the respondent, then it is desirable that the monies at present in the hands of the respondents should be preserved pending the hearing.

I would therefore continue the interim injunction made, noting, as requested by counsel, that in the event of the respondent providing a bank guarantee to the satisfaction the solicitor for the appellants, that an application to discharge the injunction would be supported by the appellants.

I would therefore allow the appeal with costs both here and in the Court below and restore the writs of summons in these actions and the interim injunction made.

(After submissions by counsel)

The bank guarantee having been given, by consent, the injunction will be discharged.

There is an application that this case be certified as fit for counsel brought from outside the jurisdiction. That application is refused.

Signed this 14th day of July 1982.

FRANCIS DALY
JUDGE OF THE COURT OF APPEAL OF THE REPUBLIC OF VANUATU.

[Editorial Note: This is an appeal from Civil Cases 27,28 and 29 of 1980]