ARREST OF SHIPS AND PRE JUDGMENT SECURITY
ADMIRALTY – Action in rem- Availability of remedy- Despite lack of maritime lien
The plaintiff had not been paid for repairs to the vessel. The defendant acknowledged indebtedness but asked for an extension in time. The defendant made an application for arrest of the vessel.
DECISION: Application granted.
HELD: The court held that the law is settled in Fiji that a repairer of a vessel has an action in rem against the vessel despite the lack of a maritime lien, and relied on Donald Pickering & Sons Enterprises Ltd v Karim’s Ltd [1997] FJHC 20; [1997] 43 FLR 41 (6 February 1997) and Baobab Industries Ltd v Owners of the Yacht ‘Jubilant’ [2009] FJHC 167; Admiralty Action 01.2009L (19 August 2009).
ADMIRALTY – Action in rem- Gratuitous promisee; prior debenture holder
Action in rem for the costs of construction. The boat designer brought a claim against ship builder for the costs of construction. The boat designer commenced proceedings in rem and obtained the vessel’s arrest. Contract for construction was between 1st defendant and designer. The 1st defendant had transferred ownership of vessel to the builder (2nd defendant). The boat builder was in receivership, and the receiver was added as a 4th defendant. The receiver filed a notice of motion to set aside the writ and discharge the warrant of arrest on the vessel.
DECISION: Writ of summons dismissed and warrant of arrest discharged
HELD: The plaintiff had no cause of action against the vessel because the contract for the design was between the 1st defendant and the plaintiff. The 2nd defendant was the beneficial owner of the vessel. The plaintiff relied on a promise made by the 2nd defendant to the 1st defendant to guarantee payment of design fees but the court found that to be an unenforceable gratuitous promise. The court also observed that as a matter of equity the debenture holder (4th defendant) had a better equity than the plaintiff being first in time. Therefore the plaintiffs would be obliged in law to defer to the debenture holder in respect of any judgement they might obtain.
ADMIRALTY – Acton in rem- Procedure for in rem action where no maritime lien- No practice where arrest warrants limited in time- Plaintiff must deposit into Court an amount to cover charges and expenses of Admiralty Marshall for arrest.
The plaintiff alleged that it had done repairs on the yacht and sought payment. The
plaintiffs made an ex parte application under the Admiralty jurisdiction of the High Court
for the arrest of the yacht.
DECISION: order granted for arrest of yacht.
HELD: The plaintiffs have a valid claim for repairs under a contract. The court does not
follow the earlier decision Star Marine Ltd v Nambuk Fisheries Company Ltd. [2002]
FJHC 16 where the arrest warrant was limited to 7 days. The court stated that the
plaintiff must do more than give an undertaking to indemnify the Admiralty Marshall and
must deposit into Court an amount to cover charges and expenses for the arrest.
Best v Owner of the Ship ‘Glenelg’ No 2 [1982] VUCA 1; [1980-1994] Van LR 48 (14 July 1982)
ADMIRALTY – Mareva Injunction- Where res of in rem action no longer exists where action in rem proceeds as action in personem
Appeal the Order to strike writ of summons and discharge interim injunction.
DECISION: Appeal allowed. The writ of summons was restored and interim injunction made.
HELD: The lower Court erred when it relied on Order 27, Rule 4 to strike the writs. The only basis to strike pursuant to this rule is where there is “no reasonable cause of action”. The Court of Appeal stated that there is a cause of action- namely the failure to pay wages alleged to be due to the crew who served on the ship. The action lies against the ship by virtue of a maritime lien and also against any contractually bound person to pay such wages. The cause of action does not become “unreasonable” when the vessel leaves the jurisdiction, because the lien on the vessel travels with her. The subsequent wreck of the vessel affects the enforceability and value of the judgement, but cannot affect the cause of action. It is not open to the Court to strike out the writs under Order 27, Rule 4 because the cause of action continues to exist wherever the vessel is and whatever condition she is in. The Court of Appeal decided that the action could continue in contract. The writs were headed “Admiralty actions in rem” but the owner was also named as a party. The endorsements in the writ made it clear that the action was brought in contract. The Court of Appeal found these factors to be indicative of a strong in personam element in the action in rem. The Court of Appeal cites the two leading decisions The Banco (1971) 1 All E.R. 524, C.A., Lord Denning M.R., 531 and Caltex Oil – (Australia) Pty Limited -v- Dredge Willemstad (1975) H.C. 136 C.L.R. 529 Gibbs J. for the rule that where an action is commenced in rem, the entry of appearance by the defendant enables the plaintiff to continue the actions against the defendant as if they were actions in personam.
Best v Owner of the Ship “Glenelg” No 1 [1982] VUSC 9; [1980-1994] Van LR 27 (3 June 1982); reversed on Appeal
ADMIRALTY – Where res of in rem action no longer exists
Plaintiff sought an interlocutory injunction whereby the defendant was restrained from disposing of any of its assets without consent of the plaintiffs or the Court until any judgement against the defendant was satisfied. The defendant applied for an order to strike out the writ on the grounds that there was no reasonable cause of action. The applications arose out of the original issue of a writ of summon in an action in rem for the arrest of a vessel in a claim for wages while the plaintiff was a member of the crew on that vessel. After the issuance of the original writ, an appearance was entered by the defendant denying the contract of employment. Before the case proceeded, the warrant expired on the vessel and the vessel was removed from its anchorage and was subsequently wrecked on a reef. The defendant contended that the Court now lacked jurisdiction because the action was in rem and the res no longer existed. The plaintiffs sought security on the insurance proceeds from the vessel.
DECISION: Defendant’s application to strike granted and interim injunction discharged.
HELD: The Court looked to the Supreme Court Rules that discourage hybrid claims and held that an action in personam must be specifically pleaded, and in this case the insurance proceeds could not be said to replace the res.
ADMIRALTY – Action in rem- Caveator must have in rem interest
The plaintiff filed an Admiralty action in rem for fuel supplied to the defendant vessel. It led to the arrest of the vessel. The plaintiff and defendant settled and the plaintiff intended to withdraw the claim and discontinue security for the arrest. The court allowed an intervenor who filed a caveat against release of the vessel.
DECISION: Order to release to vessel
HELD: The court was not satisfied that the caveator had an interest in rem against the vessel. Telephone bills and management fees do not constitute claims in rem. A claim for fishing line dated back to when vessel was licensed for fishing and court declined to lay that at the door of the defendant now.
ADMIRALTY – Arrest of Ships- Priority ranking on sale for salvage costs of the vessel
The vessel has been sold by the Admiralty Marshall and an order for the release of the vessel to the new owners had been made. The vessel had been in custody for 9 months. The Admiralty Marshall had been responsible for the care, maintenance and custody of the vessel. The second intervenor (the Applicant) had provided a berth for the vessel. For the first 6 months the vessel had been berthed at the wharf. The vessel was moved to a dolphin buoy 30 metres off shore for 3 months. A dispute arose over whether berthing charges could be levied while the vessel was berthed at the dolphin buoy. An application was made pursuant to s. 25 of the Supreme Court (Admiralty Rules) Order IV Rule 4 for priority in respect of the proceeds of the sale of the vessel for the cost of docking, wharfing and berthing of the vessel.
DECISION: Claim allowed; limited to time where vessel berthed at the wharf
HELD: There was no dispute that berthing charges were payable at the outset from the proceeds of the sale of the vessel. However, the court was not satisfied that the Applicant could levy charges for berthing at the dolphin buoy. There was no agreement between the parties for the charges at the dolphin buoy and the plaintiff was providing security and insurance at that time. The claim was limited to the time where the vessel was berthed at the wharf.
Capek v The Yacht ‘Freja’ [1980] PGNC 53; [1980] PNGLR 57 (23 April 1980)
ADMIRALTY – Action in rem- Substance of action to be derived from statement of claim not affidavit supporting arrest
The plaintiff sued in respect of necessaries supplied to the defendant vessel. The defendant took a preliminary point as to whether the action in rem was properly based. In the affidavit in support of the arrest of the vessel the plaintiff stated that the claim was for work done on the yacht. In the Statement of Claim the plaintiff’s claim was based on necessaries supplied to the vessel.
DECISION: The writ is the proper action
HELD: The Admiralty Courts Act 1840, 1861 created a claim of right of action in rem in respect of a claim of necessaries supplied to a foreign ship. However, the Act does not create a right of action in rem in relation to repairs and equipping of a ship. The court will look to the particulars of the Statement of Claim for the substance of the plaintiff’s claim, and not to the material contained in the affidavit filed for arrest of the vessel. (not followed in New Guinea Cocoa (Export) Co Pty Ltd v Vedbaek, Owner of MV ‘Aya Trigon’ [1980] PNGLR 205)
ADMIRALTY – Action in rem- In rem action for wages of crew- Security for release of vessel
The vessel was sailed from Honiara to Suva for repairs. 10 months after her arrival the Master and crew issued an action in rem claiming unpaid wages and allowances. The owner of vessel issued a motion seeking discharge of the arrest warrant and alleging that actions of crew were illegal and in breach of Shipping Act.
DECISION: The action by the crew was proper and the court had jurisdiction; there was an order to release the vessel upon payment of a F$25,000 bond.
HELD: The Court determined that the Supreme Court Rules and British Admiralty precedent supported an action in rem for the wages of the crew on that vessel. As to the release of the vessel, the Court found that the res must be released upon receiving security for the plaintiff’s claim. The plaintiff is entitled to demand such an amount as security as would cover his reasonably best arguable case, and once an application for release of a vessel is made, it is incumbent on the plaintiff to quantify that amount.
Chandra v Kiribati Shipping Services Ltd [2010] FJHC 43; Admiralty Action 1.2010 (4 February 2010)
ADMIRALTY – Action in rem- Procedure for in rem action where no maritime lien
The plaintiff claimed a sum owing for electrical repairs and maintenance to a vessel. The plaintiffs sought an order for the arrest of the vessel.
DECISION: arrest for vessel issued.
HELD: The court recognized that the claim for repairs could not constitute a maritime lien. The court cited legislative provisions which allowed the in rem action. The in rem jurisdiction of the High Court of Fiji is derived from s. 21 of the High Court Act Cap 13. Section 1(1) of the Administration of Justice Act provides the High Court of Fiji with jurisdiction to decide a claim in respect of the construction and repair of a vessel. The High Court (Admiralty) Rules set out the procedure whereby no warrant of arrest is issued until an affidavit has been filed identifying the parties and the nature of the claim. The Court found that the plaintiff was able to establish a lawful right to claim the monies due and owing pursuant to a contract, and thus established a claim on which an order for man arrest could be founded.
ADMIRALTY – Action in rem- Default judgement without arrest in in rem action
Service of the Writ of Summons and Statement of Claim was effected via the Captain of the vessel and its local agents. The defendants failed to acknowledge service. The plaintiff filed for leave to enter default judgement. The Plaintiff relied on the rules of Admiralty Proceedings where if a defendant to an action in rem fails to acknowledge service of the writ within the time limited for doing so or on the expiration of 14 days after service, then the plaintiff may apply to the Court for judgement by default. The issue was whether the court had jurisdiction to pronounce judgement when the vessel was not under arrest.
DECISION: Default judgement granted.
HELD: It is not necessary to arrest the vessel to found jurisdiction. The plaintiff must give formal notice to the persons interested that a claim is made against them or their property in a court of competent jurisdiction, and if they do not appear to vindicate their rights, judgement may be given in their absence. The property need not be in possession of the court or under the arrest of the court, but must be within the lawful control of the State or under the authority of which the Court sits.
ADMIRALTY – Actions in rem- Availability of remedy- Maritime lien not necessary for in rem action
The plaintiffs claimed not to have been paid for work done to 2 vessels and obtained warrants for their arrest. In response, the defendant owner sought the discharge of the warrants arguing that the plaintiffs were not entitled to a maritime lien and therefore were not entitled to the arrest of the vessels.
DECISION: Defendant’s motion dismissed.
HELD: It is an erroneous belief that where there is no maritime lien the right to proceed in rem does not exist. An in rem action may be brought against the vessel where the vessels are beneficially owned by the defendant which requested the work done, and the monies owed by the debtor relates to ‘maritime debts’, even though those debts are incapable of giving rise to maritime liens. The court relied on common law precedent which has been enshrined in statutory authority citing the Administration of Justice Act 1956 as applied to the High Court of Fiji which expressly puts ship repairs in ‘maritime debts’ properly brought within the purview of the Admiralty division; and s.3(4) of the Act which provides that in rem actions may be brought against a ship where the owner of the vessel is the person who would be liable on the claim in an action in personam.
ADMIRALTY – Action in rem- Fees paid while vessel in custody
The Admiralty Marshall sought payment for keeping possession of vessels which were arrested by Court Order. The arrest warrant included a personal undertaking of the plaintiffs to pay all fees and expenses incurred by him in respect of the arrest of the vessel and for the care and custody of the vessel while under arrest. The vessels were privately berthed after their arrest.
DECISION: Claim disallowed
HELD: The daily fee is solely chargeable for keeping possession of the ship and not so long as the arrest warrant shall remain undischarged. The custody remained with the Marshall, but following the arrest, the vessels had remained in the possession of third parties.
ADMIRALTY – Arrest of ships- In FSM ship mortgage does not come within admiralty jurisdiction
The plaintiff commenced an action to enforce collection of delinquent loans which were secured by loans over the defendant vessels. An arrest warrant was issued on the vessels on the exparte application by the plaintiff. The defendant opposed the arrest on the basis that the action on the ship’s mortgage did not come within the admiralty jurisdiction.
DECISION: Order of arrest and warrant of arrest vacated.
HELD: The court did not agree with the plaintiff’s submission that the US common law was no longer persuasive. The plaintiff cited US, Canadian and UK legislation that recognized ship’s mortgages as maritime liens enforceable in admiralty. The plaintiff argued that these statutes along with the International Convention for Unification of Certain Rules Relating to Maritime Liens and Mortgages created a common law that should be adopted in this instance. The court declined to do so on a number of bases: There was no shipping industry financed in the FSM that required that protection of admiralty. The case involved a foreign corporation’s action against a foreign vessel, a circumstance not within the original purpose of the various Acts. The court would not selectively select adopt only the jurisdictional aspect of the various statutes to satisfy the plaintiff. The international convention could not be adopted as the purpose of that document was the establishment of reciprocal recognition and there was no statute in the FSM for the registration of ship’s mortgages.
ADMIRALTY – Defendant vessel cannot be moved to different venue in in rem action
The defendant vessel was docked in Chuuk and the FSM wanted to move it to Pohnpei on the basis that the surveillance vessel that was guarding the defendant vessel was in need of repairs, and ship keeper’s costs would be lower in Pohnpei. The FSM filed a motion to have Temporary Restraining Order set aside.
DECISION: Temporary restraining order set aside. FSM not to move the defendant vessel from Chuuk State without an order from the court.
HELD: The Admiralty statute does not anticipate transfer, and thus the possibility of transfer does not exist. In an in rem forfeiture of the defendant vessel, jurisdiction and venue are so interrelated that the effect of a move is unclear.
In re Kuang Hsing No 127 [1995] FMSC 5; 7 FSM Intrm. 81 (Chk. 1995) (8 March 1995)
ADMIRALTY – In order to exercise in rem jurisdiction the thing over which jurisdiction is to be exercised must be physically present in the jurisdiction and under the control of the court.
The State brought an in rem action for forfeiture of the defendant vessel for fisheries violations. The defendant vessel was in the FSM but had not been seized, nor had a bond been posted for security. The owner had not been made party to the action. The defendant filed a motion to dismiss for lack of in rem jurisdiction.
DECISION: Action dismissed without prejudice.
HELD: The court could not exercise in rem jurisdiction over the vessel that had not been seized. The owner was not named as a party to the action and the Code allows civil penalty claims to be brought only against a “person”. The State may pursue a civil claim in a new action.
ADMIRALTY – Arrest of Ships- claims giving rise to a maritime lien take priority over claims under mortgages; crew’s claim for wages rank in priority to mortgagee
The vessels were arrested and sold with the proceeds paid into the court. The court was asked to determine the order of priority of the various claimants. The first plaintiff represented the crew’s claims for wages and the intervenor seeking priority was the ship’s mortgagee.
DECISION: If the crew’s claim is properly established it ranks in priority to the claims of the mortgagee.
HELD: The court followed English Admiralty law where those claims that give rise to a maritime lien take priority over claims under mortgages in the distribution of a limited fund by the court, and the mortgagee ranks in priority to all classes of claims that have not been treated as giving rise to maritime liens.
Kosrae v MV Voea Lomipeau [2000] FMSC 31; 9 FSM Intrm. 366 (Kos. 2000) (7 April 2000)
A Tongan vessel damaged the dock in the State of Kosrae in the FSM. Kosrae brought an action in rem against the vessel for damages. The vessel was not arrested, nor within the FSM. Defendant brought motion to dismiss claim.
DECISION: Action dismissed
HELD: The Court could not exercise in rem jurisdiction if the ship was not arrested and not within the FSM.
Leong v The Ship “Ufi Na Tasi” [1999] SBHC 38; HC-CC 097 of 1999 (19 April 1999)
ADMIRALTY- Arrest of ships- Warrant of arrest will not be discharged where warrant granted on ex parte application and the defendant asks for an adjournment in order to prepare affidavits to challenge arrest.
The ship was sold to the plaintiff and the plaintiff took delivery of the ship. Subsequently the vendor acquired possession of the ship through a business transaction. The vendor refused to return the ship to the plaintiff. An arrest warrant was granted on an ex parte application. After the arrest the defendant asked for an adjournment in order to prepare affidavits to
oppose the arrest. The plaintiff agreed to an adjournment, and asked that the warrant of arrest be discharged.
DECISION: 7 day adjournment granted. Discharge of warrant of arrest not ordered.
HELD: Prima facie the plaintiff is the registered owner of the vessel and entitled to discharge of the warrant. However the court decided that the vessel would remain under arrest for at least 7 days in order to determine the position of the person who was in possession of the vessel at the time of the arrest. The court ordered that all persons who wanted the warrant not discharged must tender security or undertaking as to damages that the plaintiff may suffer while the ship remained under arrest.
Maruwa Shokai (Guam) Inc v Pyung Hwa 31 [1993] FMSC 1; 6 FSM Intrm. 001 (Pon. 1993) (4 January 1993)
ADMIRALTY – Maritime lien- transshipment of fish from vessel to market constitutes a maritime lien for the purposes of general maritime law. A General agent is not barred from obtaining maritime lien. A maritime contract cannot be converted into a non-maritime contract so as to divest Admiralty Court of its jurisdiction.
The plaintiff and defendant entered into an agency contract whereby the defendant was to supply supplies and services to the defendant’s three vessels. The defendant did not pay, and the plaintiff obtained an arrest warrant. The vessels were arrested and the defendant filed a motion for a order dismissing the action for lack of jurisdiction.
DECISION: defendant’s motion dismissed.
HELD: The defendant opposed the plaintiff’s action on two grounds. The defendant contended that the transshipment of fish did not give rise to a maritime lien as it did not qualify as necessaries supplied to the vessel. The court held that the transshipment costs of getting the fish from the vessel to market were similar to stevedoring expenses which are considered necessaries, and further, the scope of necessaries has broadened over the years. The defendant also contended that maritime jurisdiction did not extend to necessaries furnished pursuant to an agency contract. The court held that it is the nature of the goods supplied rather than the nature of the contract that determines whether a maritime lien if available to the plaintiff. As to the defendant’s contention that the parties did not intend the agency agreement to be maritime in nature, the court said that the parties cannot by stipulation convert a maritime contract into a non-maritime one so as to divest the court of jurisdiction.
Meninzor v MV Caroline Voyager [2007] FMSC 22; 15 FSM Intrm. 97 (Pon. 2007) (15 June 2007)
ADMIRALTY – Where maritime lien available under 19 FSMC 326(2)(b); where arrest of vessel permitted under 19 FSMC 337(1).
The plaintiff was injured in a fall from a state owned vessel. A complaint was filed for damages, and a motion for arrest of the vessel was also filed. The plaintiffs requested a review under Rule C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims which provides that the court shall review the verified complaint to determine whether conditions exist for an in rem action.
DECISION: Plaintiffs have a claim for personal injuries secured by a maritime lien pursuant 19 FSMC 326(2)(b). Plaintiff is denied a warrant for the arrest of the vessel pursuant to 19 FSMC 337(1).
HELD: The relevant sections of the Code allow a maritime lien for injuries suffered on board the vessel. An order for the arrest of the vessel is only available where there has been a default in payments secured by the maritime lien, and in this case the claim has yet to be reduced to judgement
MV Hai Hsiang #36 v Pohnpei [1996] FMSC 56
ADMIRALTY – Action –in rem- FSM Supreme Court has exclusive jurisdiction over admiralty and maritime cases- no exception for in rem actions brought as a result of state fishing violations
The issue considered is whether an in rem civil action for forfeiture of a commercial fishing vessel for violation of a state fishing law within state waters falls within the original and exclusive jurisdiction of the FSM Supreme Court.
DECISION: The National Court has exclusive jurisdiction for admiralty and maritime cases.
HELD: It is recognized that the States do have the sole power to legislate the regulation of natural resources and navigation and shipping within the 12 mile limit. However, the Constitution grants exclusive and original jurisdiction to the FSM Supreme Court trial division, with no exceptions.
An action in rem for “necessaries supplied to the vessel” was brought in the Admiralty jurisdiction of the court. At the outset counsel for the defendant submitted that the Statement of Claim did not disclose a cause of action known to the law of Papua New Guinea.
DECISION: Judgement in favour of the defendant
HELD: The cause of action in rem for necessaries supplied to a vessel was abolished by statute on Independence. The common law of contract and quasi-contract is applicable and appropriate. As such there is no liability on the owner of the vessel for the purchase of supplies where the contract was not between owner and supplier. (The court did not agree with previous decision Milan Capek v The yacht “Freja” [1980] P.N.G.L.R. 57)
Rush Corporation v Long Line Tuna Ltd [2004] PGNC 219; N2559 (3 June 2004)
ADMIRALTY – Debt recovery not an admiralty action- Strict compliance with forms for in rem action.
There was a written agreement between the plaintiff and the defendant whereby the plaintiff agreed to lend the defendant funds to finance relocation of the vessel. The money was not repaid and the plaintiff brought an action in rem to for repayment of the debt and arrest of the vessel. The defendant filed a motion to dismiss the action.
DECISION: Action dismissed.
HELD: An action for debt recovery cannot be instituted by an action in rem. Order 21 Rule 2(1) of the NCR sets out matters for actions which may be assigned to Admiralty, and debt recovery is not among those matters. The court also looked to the Halsbury’s Laws of England and found that only mortgages as debts will be considered, and the case at hand was not a mortgage. Further the court stressed that proper documentation must be followed in actions in rem- the Writ of Summons and Arrest Warrant must be the forms specifically drafted for the purpose of in rem actions. Otherwise the documents will be defective in form.
Ship ‘Federal Huron’ v Ok Tedi Mining Ltd [1986] PGSC 9; [1986] PNGLR 5 (20 January 1986)
ADMIRALTY – Action in rem- jurisdiction of PNG courts since Independence
The plaintiff was the owner and consignee of cargo which was shipped from the United States to Papua New Guinea. The cargo was damaged on unloading and the plaintiff sued for damages. The ship was arrested under a warrant of arrest in rem. One of the grounds of the defence was that the Statement of Claim did not disclose a cause of action known to the law of Papua New Guinea, and this ground was argued before the trial judge as a preliminary point. The trial judge decided in favour of the plaintiff holding that whereas the Colonial Courts of Admiralty Act 1890 (Imp) ceased to operate in Papua New Guinea in 1975 at Independence, the court was able to formulate a law pursuant to the Constitution, Sch 2.3(1) allowing the action. The decision was appealed. The appellant did not contest the finding that there was no longer Admiralty jurisdictions in Papua New Guinea other than a common law jurisdiction, and appealed the contention that the action could be based on any statutory right in rem. The respondent’s case rested on the statutory right stemming from the Admiralty Court Act 1861 (Imp) through the Colonial Courts of Admiralty Act, s. 6 which created an in rem action for damage to goods by the shipper.
DECISION: appeal dismissed. Since Independence the courts of Papua New Guinea have had an Admiralty jurisdiction within the parameters and limitations set down in the Colonial Courts of Admiralty Act 1890.
HELD: The Appeal Court makes an exhaustive examination historical analysis of the
jurisdiction of the Admiralty Court in Papua New Guinea. In doing so the Court discovered that in Papua the 1861 Admiralty Court Acts were not brought into operation after Independence so that the common law remained unmodified; conversely in the Mandated Territory of New Guinea the Colonial Courts of Admiralty Act was preserved after Independence by s. 14 of Laws Repeal and Adopting Act 1921. The anomalous result was that the Colonial Courts of Admiralty Act was introduced to the new Independent State for part of the country only. The Court was able to utilize Sch. 2.3 of the Constitution to make the application of the Act applicable to the whole of Papua New Guinea. This decision by the Court of Appeal put to rest the conflicting authorities as to Admiralty jurisdiction that had been created by earlier cases.
ADMIRALTY – action in rem- Jurisdiction
The plaintiffs brought an in rem action pursuant to supply of goods and services to a domestic vessel. The defendants filed an application on notice to strike out a Writ of Summons as disclosing no reasonable cause of action.
DECISION: Writ of Summons struck out.
HELD: The Court has no jurisdiction in Admiralty in relation to a claim of goods and services supplied to a domestic ship. The Admiralty jurisdiction of the courts in PNG is found in the Colonial Courts of Admiralty Act 1890. Jurisdiction in relation to a claim of goods and services extends only to foreign ships. This purview may have been extended to include domestic ships by the Administration of Justice Act 1956 in Britain, but this statutory change has not been adopted in PNG.
Wahono v The Ship MV Yung Yu No 606 [2001] SBHC 102; HC-CC 009 & 010 of 2001 (23 March 2001)
ADMIRALTY – Maritime lien- priority of competing liens. Maritime lien attached to cargo/freight.
The plaintiffs filed a claim for outstanding wages. The action proceeded against the vessel and a warrant of arrest was executed on the vessel and catch. After the arrest the Government asserted a claim over the catch as well pursuant to s. 52 of the Fisheries Act 1998. The catch was sold and the monies paid into court . The plaintiff was granted judgement, and sought an Order to have the monies in court released to them.
DECISION: Order granted. Monies paid to plaintiffs.
HELD: As to the vessel, the plaintiff’s claim took priority pursuant to the Shipping Act 1998. The defendant submitted that since the Shipping Act was silent on priorities of maritime liens over the catch, the case would have to be decided according to common law and Administration Act 1956 (UK). The court found that at common law a lien may attach to freight/cargo provided it is enforced in conjunction with the enforcement of the lien against the vessel. The court was satisfied that in this case the catch had been subjected to the same lien as against the vessel for the same debt. The court found that at common law a maritime lien attaches at the date of arrest and has retrospective effect. The Ministry of Fisheries failed to show that their seizure took effect prior to the plaintiff’s lien.
Wasawasa Fisheries Ltd v Karim’s Ltd No 1 [1998] FJHC 76; HBG0001j.1996s (26 May 1998)
ADMIRALTY – Action in rem- Where arrest not pursuant to maritime lien-
Determination of ‘beneficial owner’ The plaintiffs allege that the defendants owe compensation for fuel, bait, fishing gear, and crew’s wages. An action in rem pursuant to the Administration of Justice Act 1956 was commenced, and a warrant for arrest of the vessel was issued. There were 3 interlocutory applications. The defendant filed a motion to set aside the warrant of Arrest until the hearing and determination of the action. The plaintiff requested that the vessel be released to the custody of the plaintiff or the Admiralty Marshall for the purpose of appraisal and sale. An intervenor filed a motion seeking an order for the release of the vessel to him, or a declaration that his claim take priority over all other claims and an order that the vessel be sold and his claim satisfied from the proceeds.
DECISION: Vessel to be appraised and sold and proceeds to be deposited in the Court pending determination of the plaintiff’s claim.
HELD: The intervener claimed that he was the beneficial owner of the vessel. The intervener had entered into an agreement of sale with the defendant but the defendant had defaulted on payment, and by agreement the defendant was obliged to return possession of the vessel to the intervener in the event of default. The court found that even though the defendant had the vessel registered in his name, the intervener was the beneficial owner on the terms of the agreement. As such, the in rem action of the plaintiff could not be sustained. The plaintiff’s claim depended on the provisions of the Administration of Justice Act 1956, and pursuant to s. (3)(4) the action could only be sustained where the defendant is the beneficial owner of the vessel.
Wasawasa Fisheries Ltd v Admiralty Marshal of Fiji [2002] FJCA 54; ABU0025U.98S (23 April 2002)
ADMIRALTY – Action in rem- Fees paid while vessel in custody
The request for the arrest warrant included a personal undertaking on behalf of the plaintiff (appellant) to pay all fees of the Marshall and expenses incurred by him on his behalf in respect of the arrest, and the care and custody of the vessel while under arrest. On release of the vessel the Marshall sought the per diem fees which had accrued while the vessel was in custody. The plaintiff disputed the amount of the fees arguing that the fees should not accrue after the conclusion of the hearing because the decision took a long time. The parties filed affidavits as to this issue but prior to the hearing a decision in Donald Pickering & Sons Enterprises Ltd v Karims Ltd [1998] FJHC 221; [1998] 44 FLR 161 (24 July 1998) held that the fee arrangement provided by the schedule related only to circumstances where the Marshall had taken possession of a vessel and not where the Marshall had acted on a warrant for arrest. In this case an agreement had been made between the Marshall and defendant whereby the defendant provided a watchman for the vessel for the duration of the arrest. The plaintiffs appealed the order to pay the fees.
DECISION:Appeal dismissed.
HELD: The Pickering decision rested on the court’s interpretation of “possession”. The court decided not to follow Pickering on the basis that “possession” must be read in the context of the applicable Rules.
Westpac Banking Corporation Ltd v The Ship “Motunu” [2004] SBHC 1; HC-CC 194 of 2004 (23 July 2004)
ADMIRALTY – Arrest of ships- Fact of arrest is notice of arrest- Lessor of vessel has beneficial use under the lease, not ownership
The court had issued an arrest warrant and a subsequent order granting the ship to the plaintiff. The vessel was moved to Australia. The first intervenor leased the vessel from the owner, and the 2nd intervenor had a sublease. The interveners applied to have the order for possession set aside. The 1st intervener argued that no notice of arrest had been given to them, and also claimed dispossession as owner.
DECISION: Application dismissed.
HELD: As to notice of arrest, the vessel was in the possession of the intervener at the time of the arrest. The court stated that the fact of the arrest was notice enough. As to the ownership issue, the court found that the 1st intervenor had beneficial use rather than ownership of the vessel. The claim arose under a mortgage agreement between the plaintiff and vessel owner earlier in time to the lease agreement, and there was no evidence that there was an option to purchase in the lease agreement. The right of the plaintiff to proceed in rem was based solely on the vessel’s presence in the country. In the present hearing the two interveners were Australian entities. Their dispute arose out of the lease of the vessel coupled with the effect of the arrest and order for possession to the plaintiff. As such the court directed the interveners to Australia as the forum conviens to settle their dispute.