Chiu Chik Seng and Others v. The French Government

HCAJ000011/1946

IN THE SUPREME COURT OF HONGKONG

-----------------

ADMIRALTY JURISDICTION

-----------------

Action No.11 of 1946

-----------------

Coram: E.H. Williams, Puisne Judge

Date of Judgment: 30 May 1947

-----------------

JUDGMENT

-----------------

1. The more important and relevant facts in this action are as follows :-

2. On the 29th November, 1946, a writ of summons in rem was issued in this Court by the plaintiffs Chiu Chik Seng and 26 others claiming $14,880.00 for wages against the steamship Chai Seng, the writ being addressed to 'Wong Pui Chi, the owner and all those interested in the steamship "Chai Seng"'. On the 3rd December, 1946, a warrant for the arrest of the ship was issued: it was seized next day. On the 28th December, a memorandum of appearance was filed on behalf of Wong Pui Chi as owner of the ship. The action was set down for trial and on 8th January, judgment by consent was entered for the plaintiffs for the amount claimed and costs, with liberty to apply for the sale of the ship, the judgment being filed the following day. Application was then made for the sale of the ship and on 7th February, 1947, she was sold by public auction for $135,000.00. On the 27th February, a notice of motion was filed for an order for payment out of the claim and costs. In the meantime, two other actions in rem had been commenced against the same ship (Admiralty Action No.1 of 1947 - claiming $140,000.00 for money advanced for necessaries, repairs and crew wages, and Admiralty Action No.2 of 1947 - claiming over $14,400.00 on similar grounds). In Admiralty Action No.1 of 1947, judgment had been entered by consent for the plaintiffs for the claim and costs on the 8th February, 1947, but proceedings had not advanced to any length in Admiralty Action No.2 of 1947.

3. The motion filed on 27th February in Action No.11/46 came up for hearing on 1st March but was adjourned 1 week pending inquiries as to the true ownership of the vessel, and on 8th March an appearance under protest was entered for the French Government as Interveners, and in addition a notice of motion was filed on behalf of the French Government that the steamship "Chai Seng" being the property of the French Government, a recognized foreign independent state and that the said state declining to sanction the institution of these proceedings in this Court, the writ issued herein on 29th November, 1946, and all subsequent proceedings herein including the judgment given on 9th January be set aside. The plaintiffs' application for payment out was accordingly adjourned sine lie pending the hearing of the motion to set aside the proceedings. On the 13th March an appearance was entered for the purchaser at the auction of the ship.

4. The motion to set aside all proceedings was heard before me on 22nd April and after hearing counsel for the respective parties, I made the order asked for and stated I would later give my reasons in writing which I now proceed to do.

5. At the hearing before me, Solicitor for Wong Pun Chi informed the Court that he had received no further instructions from him in the matter but was present in Court merely to produce certain documents which Counsel for the plaintiffs or Counsel for the Interveners had notified him they desired produced.

6. Prior to the hearing, the Interveners had filed a large number of affidavits to the effect that the ship was in fact the property of the French Government. No affidavits were filed in reply either by the plaintiffs or by Wong Pun Chi denying any of the statements therein. The history of the ship as set out in the affidavits was as follows. At the end of 1941, the French Government were owners of and had in ...(illegible) service in French Indo-China, among other craft, a number of Hopper barges (such a barge is a form of lighter required in connection with dredging operations). The one relevant here was marked number '5' and was called the "DELAY". Until March 1945, the French authorities carried on their duties in the normal way, continuing to use the "DELAY" in dredging work at Haiphong. On 9th March 1945, the Japanese seized the port, including all public property of the French Government and interned the officials. Thereafter, the "DELAY" disappeared from Haiphong. An examination of the "Chai Seng" in Hong Kong recently made by French officials, who were familiar with the "DELAY" and also by a Marine surveyor acting for them, showed that in their view the two were unmistakably the same.

7. The real and substantial point which was argued before me was this :- Was the French Government impleaded in the proceedings which had taken place in this Court in connection with this Admiralty action. It follows that if the French Government was impleaded then the Court had no jurisdiction in the matter and any judgment given was a mere nullity. It was agreed by both Counsel that the Court had inherent jurisdiction to set aside such nullity. Counsel for the Interveners claimed that they unquestionably were impleaded and Counsel for the plaintiffs maintained they were not.

8. Counsel for the plaintiffs at one stage of his argument submitted that there was no proof that the French Government owned the "Chai Seng". He put it higher and said 'it is denied that the French Government is the owner'. Counsel for the French Government then stated that this was the first hint he had received that the ownership by the Interveners of the ship was being challenged: that certain French witnesses who had made affidavits had been kept in the Colony for some days to the knowledge of all parties concerned so that their evidence on affidavit as to the ownership and identity of the "Chai Seng" could be challenged by cross-examination or otherwise if it was seen fit so to do but that they had not been cross-examined nor had any affidavits been filed challenging their statements. He asked me to rule that it was not now open to Counsel for the plaintiffs to say that the French Government was not the true owner. I ruled accordingly because I considered that denied of ownership should have been raised before the motion came to be heard. The plaintiffs were well aware from the notice of motion, which was dated 8th March, that the French Government claimed to intervene on the ground that it was the owner of the "Chai Seng". It was open to plaintiffs and it was their duty to intimate to the Interveners before the hearing by filing affidavits in reply or otherwise that they were challenging the affidavits on the question of ownership. If that fact was being challenged and the Interveners had notice thereof, then they might have come to the hearing prepared, if necessary, with additional evidence on the point. In my opinion, the affidavits showing proof of identity and of ownership were of such a nature that it would have required strong evidence to the contrary to persuade me that the French Government was not the owner of the vessel now called the "Chai Seng".

9. Counsel for the Interveners referred to a number of authorities in support of his submission that the French Government was here impleaded. In the Parlement Belge (1879-1880) 5 P.D. 197, the action was an Admiralty action in rem against the ship to recover redress for a collision. It was there held on appeal that it was immaterial whether the public property (there the ship) of the independent State was used for trading purposes. One passage in the judgment is, I think, very relevant to the submission that the French Government was impleaded occurs on page 220. It reads 'if the remedy sought by an action in rem against public property is, as we think it is, an indirect method of exercising the authority of the Court against the owner of property, then the attempt to exercise such authority is an attempt inconsistent with the independence and equality of the state which is represented by such owner'.

10. Another case referred to was Vavasseur v. Krupp (1878) 9. Ch. 351. There the plaintiff had brought an action against Krupp claiming an injunction for the infringement of the plaintiff's patent for making shells. The shells had been made at Essen, bought there for the Government of Japan and brought to England in order to be put on board warships built there for the Japanese Government. An injunction was granted restraining the defendants and the owners of the wharf where the shells lay from selling or delivering the shells to the Japanese Government. Notice of motion was later given on the part of the Mikado (after permission had been given him to be added as a defendant) to have the injunction dissolved. Order was accordingly made and affirmed on appeal that notwithstanding the injunction he should be at liberty to remove the shells - It was there made clear by James L.J. (p.355) that even though Krupp or other person might have been liable to plaintiffs in an action for damages, that did not interfere with the right of the Mikado to ask to be allowed to take his property. 'He says "It is my public property and I ask you for it". That seems to me to be the whole of the case'. The words of Cotton L.J. on page 361 are relevant here as representing the similarity between the position of the Mikado in that case and the French Government here - he (the Mikado) is simply coming and saying "the order of the Court, possibly inadvertently, interferes with my sovereign rights" and a few lines later 'But again, even if the Mikado had brought himself into Court as an ordinary defendant, that, in my opinion, would not give the Court jurisdiction as against the subject matter, namely, jurisdiction to interfere with the public property of Japan, which is represented here by the Mikado.' Another case to which I was referred by Counsel for the Interveners was the Porto Alexandre (1920) P.30 where the facts were somewhat similar to those in the Parlement Belge case and this passage which is from the judgment of Scrutton L.J. on p.38 is apt: 'the moment property is arrested in the Admiralty Court, a proceeding is instituted against the person, and the person is compelled to appear if he wants to protect his property, and by seizing his property the personal rights of the sovereign or the personal rights of the states are interfered with'. Further support to submission of Counsel for the Intereveners is contained in the Jupiter case (1924) P. 236. In that case the plaintiffs, claiming possession as owners of the vessel, issued a writ in rem directed against 'the steamship Jupiter and all persons claiming any right or interest in the said steamship'. It was held that the issue of such a writ against a vessel in which a foreign sovereign state claimed an interest was in effect impleading the sovereign state and, although the right of the sovereign state to possession of the vessel was in dispute, the Court would not investigate the facts and the writ must be set aside.

11. Reference was also made by Counsel for the Interveners to the Cristina case (1938) 1 A.E.R. 719 and particularly to p.730 where Lord Wright discusses the modern writ in rem. In this case, the House of Lords held that the principle of the doctrine of immunity of foreign public states from the processes of our courts applied in cases where the foreign state had merely requisitioned a ship owned by a private individual. The decision in that case was based on the fact that the Cristina was itself in the actual possession or under the control of the foreign state (see page 731 - A. to B.).

12. In the Haile Sellassie v. Cable and Wireless Ltd. case, (1938) 3 A.E.R., the facts of which are entirely different from the present case, it was decided that a mere claim to property by a foreign state is insufficient to oust the jurisdiction of the Courts. One passage in it, however, was relied on by Counsel for the Interveners in support of his case. At page 386 Sir W. Greene M.R., states 'Where it is either admitted or proved that property to which a claim is made either belongs to, or is in the possession of a foreign sovereign or his agent, the principle (i.e. that the Court's jurisdiction is ousted) will apply.

13. Counsel for plaintiff argued firstly that the Interveners having claimed ownership, should prove such ownership in an action for possession against Wong Pui Chi or of the purchaser at the public auction. It was at this stage I ruled that, as the affidavits had not been challenged on the point of ownership, the case must proceed on the basis that the French Government had proved ownership. Counsel for plaintiff then proceeded to his main submission, namely, that the French Government was not here impleaded as the vessel was not in the actual possession of the state when the cause of action arose. He referred to the Annette: The Dora case (1919) P. 105 at p.111 where the following statement by Hill J. occurs 'If it (i.e. the sovereign state) is not in possession, the Court interferes with no sovereign right of the Government by arresting the vessel, nor does it, by arresting the vessel, compel the Government to submit to the jurisdiction or to abandon its possession'. In the Annette case, the action was by the owners of the vessels in an action in rem claiming its possession - the vessel had been requisitioned by the Provincial Government of Northern Russia and then hired out to a partnership association for the purpose of trade. The provincial Government entered appearance under protect and filed a motion to set aside the writ but the motion was refused. The decision was based on the finding that the vessel, if it ever was in the possession of the Provincial Government, had passed out of that possession. The facts of the Dora case were similar.

14. Counsel for plaintiff also relied on the Jupiter (No.2) case (1925) P. 69 and the Jupiter (No.3) case (1927) P. 122 & 250. In the Jupiter (No.2) case, it was held the proceedings did not implead a foreign sovereign. There the plaintiff claimed to be owner of the vessel. The defendants, an Italian Company, had bought the vessel from an English Company who purported on behalf of the Soviet Government to sell her under a contract. The Italian Company moved to set aside the writ on the grounds, inter alia, that the action impleaded a foreign sovereign state. It was held the proceedings did not directly or indirectly implead the Soviet Government. The facts in the Jupiter (No.3) case were similar.

15. Counsel for plaintiff submitted that the cases referred to by Counsel for the Interveners were cases where the state had possession of the ship by its servants or agents and that it was because it had such possession it was held to be impleaded.

16. I do not agree that possession is the sole or vital fact. It is true that in the Annette case the basis of the decision that the state was not impleaded was that the vessel, if it ever was in possession, had passed out of possession of the state but the real question in that case was as to the right of possession between the plaintiff who was admitted the owner and the master, who was in possession claiming the right of possession under contract with the provincial Government. The learned judge there decided that it had not been proved to his satisfaction that the vessel was ever in the possession of the Provincial Government. The plaintiffs, not the Provincial Government, were the admitted owners. In the present case, it has been proved to my satisfaction that the French Government were the owners of the vessel when the cause of action arose in this Court. They may have lost physical possession but have never parted with their right of possession. The decision in the Jupiter cases are distinguishable in that in the Jupiter (No.1) case, the Russian Government were the owners of the vessel and as such owners, claimed the possession: In the Jupiter No.2 & 3, the Russian Government did not claim at the time of the action to be the owners or to have the right of possession. (see p.78 of the Jupiter No.2 case).

17. For these reasons I held that the French Government was impleaded in the proceedings before the Court with the result that the Court had no jurisdiction. I accordingly allowed the motion and made a declaration that the French Government was entitled to the possession of the steamship "DELAY" known in these proceedings as the s.s. "Chai Seng". The question of the costs of the French Government in these proceedings and that of the purchaser's is reserved.

18. On 3rd May, 1947, in Chambers, I refused the purchaser's application for the refund of the auctioneer's commission and fees, and for interest accrued on the purchase price which sum was lodged in Court, an application which was made against the Registrar of this Court.

Representation: