MARITIME LIENS
ADMIRALTY LAW- 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.
Jeyang International Company Ltd v Owners of the Motor Vessel Kao Ya No 1 and Kao Ya No. 137 [2002] FJHC 33; HBG0009d.2001s (12 July 2002)
MARITIME LIENS- priority of claims- seaman’s wages and mortgagee
Two vessels had been arrested and sold, with the proceeds paid into court. The issue before the court was the priority of claimants to funds. The plaintiff represented the crews’ claims to wages secured by maritime lien, and the intervenor was the Bank of Taiwan to which the vessels were mortgaged.
HELD: The crews’ wages rank in priority to that of mortgagee.
DECISION: At English Admiralty Law claims which are maritime liens rank in priority to all other claims including mortgages.
Maruwa Shokai (Guam) Inc v Pyung Hwa 31 [1993] FMSC 1; 6 FSM Intrm. 001 (Pon. 1993) (4 January 1993)
MARITIME LIENS- transshipment costs can constitute a maritime lien as necessaries- necessaries defined as those “things reasonably needed in the business of the vessel”
The plaintiff and defendant entered into an agency agreement whereby the plaintiff was to supply supplies and services to the defendant ship. On non payment, the plaintiff filed for summary judgement asking the court for a maritime lien on the vessel. The contentious issue was the inclusion of transshipment services costs in the maritime lien. Transshipment service was the arrangement for unloading, grading and packing of the fish and the arrangement of air cargo space to get the fish to market.
HELD: summary judgement for the plaintiff
DECISION: Transshipment costs are similar to stevedoring costs which are
considered as necessaries. The scope of necessaries has become broader and can be
defined as “those things reasonably needed in the business of the vessel”.
Meninzor v MV Caroline Voyager [2007] FMSC 22; 15 FSM Intrm. 97 (Pon. 2007) (15 June 2007)
MARITIME LIENS- Claim for personal injuries pursuant to 19 FSMC 326 allows for a maritime lien
19 FSMC 337 authorizes the arrest of the vessel only after there has been a default in payments secured by the maritime lien. The plaintiff suffered personal injuries on a vessel which was in possession of the State of Pohnpei under a demise charter agreement. The plaintiff brought a claim for personal injuries and claimed a maritime lien under 19 FSMC 326 (2) (b) and sought the arrest of the vessel under 19 FSMC 337(1). The plaintiff filed a motion for the arrest of the vessel and a request for review under Rule C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims which provides that the court shall review the verified claim and may issue an order authorizing the arrest of the vessel.
HELD: Motion for an arrest warrant denied.
DECISION: The court held that the plaintiffs did have a claim for personal injuries secured by a maritime lien. The court will not order the arrest because that relief under Title 19 is only available where there has been a default in payments secured by a maritime lien, and the case has not proceeded to judgement yet. Further, the plaintiff had not recorded the lien against the vessel which was a statutory requirement for personal injuries under Title 19.
Seafreight Pty Ltd v The Ship ‘Manutea’ [1975] PGSC 28; [1975] PNGLR 64 (29 March 1975)
MARITIME LIENS- under “no cure-no pay” agreement there was a period after the successful operation where there was no maritime lien except as provided by cl. 5 where “the contractor has reason to believe that the removal of the salved property is contemplated contrary to the … agreement”.
The defendant ship (Manutea) was successfully salved by the plaintiff. During the extensive tow the two captains entered an oral salvage agreement which was to be in terms of a Lloyd’s Salvage Agreement described as a “no cure- no pay” agreement. Contrary to the agreement the salved ship was moved from her place of safety without the consent of the salvor. The plaintiff had her arrested and filed an in rem claim for salvage fees. The claim for salvage fees was made after the arrest. The owner of the Manutea applied for an order to set aside the warrant to arrest and to release the vessel from the arrest made under the warrant.
DECISION: Order granted
HELD: The court looked at clauses 4 & 5 of the contract. Pursuant to this contract the salvor must notify Lloyd’s of the amount for which he requires security be given- this was not done by the salvor in this case. The contract also provided that the property would not be arrested or detained unless security was not given within 14 days. The court decided that there was a period after the successful salvage operation and before the claim under a “no cure- no pay” agreement where there is no maritime lien except where there is reason to believe that removal of the salved property is contemplated. The ship had been moved without the consent of the plaintiff but the court found that there was good reason to move the ship and it had not been moved to a foreign port. There had not been a claim made for salvage at the time of the arrest because at that time the claim had not been quantified.
Wahono v The Ship MV Yung Yu No 606 [2001] SBHC 102; HC-CC 009 & 010 of 2001 (23 March 2001)
MARITIME LIENS- maritime lien may attach to catch as well as vessel- lien for seaman’s wages ranks above Government claim for catch pursuant to Fisheries Actclaim for wages predates Government’s claim- maritime lien has retrospective effect from the date the right to the lien accrued.
The plaintiff held a maritime lien for unpaid seaman’s wages which extended over the defendant vessels and their catch. Following the arrest of the vessel pursuant to the plaintiff’s claims, the Government asserted claims over the catch pursuant to the Fisheries Act 1998. The catch was sold and proceeds were paid into court. The plaintiff sought an order to have the amount held in court released to them in partial satisfaction of the judgement debt, and this was opposed by the Government who asserted their right to the catch.
HELD: Order granted.
DECISION: In common law a maritime lien may attach to freight/cargo and the court concluded that this included the catch of the fishing vessel. The maritime lien has priority over the Government’s claim. The court found that the Government’s claim was vague, and in particular did not specify the date of the claim. The maritime lien attached at the date of arrest and has retrospective effect from the date the right to the lien accrued- which would have predated the Government’s claim.