Arcom Shipping Management Ltd v. The Owners of the Ship or Vessel "Turgut Guneri" (Turkish Flag)

HCAJ000202/1981

Admiralty Jurisdiction - Defendants' application to set aside warrant of arrest of vessel "Turgut Guneri" - S. 3(4) of the Administration of Justice Act, 1956 - Whether 0.75 R.5(8)(c)-the grounds of the deponent's belief that defendants were liable on the claim in an action in personan-complied with to found Court's jurisdiction - Court's discretion to allow warrant to remain in force by virtue of 0.75 R.5(4) notwithstanding affidavit was defective - Defendants' application refused.

Coram: Mr. Commissioner Barnes

Date of Judgment: 12th August, 1981

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JUDGMENT

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1. I have before me a summons dated the 7th August 1981 taken out by the defendants in which application is made on the part of the defendants for an order that the warrant of arrest of the ship or vessel "Turgut Guneri" be set aside and that all further proceedings in this action be stayed on the grounds that this action and/or warrant of arrest does not fall within Section 3(4) of the Administration of Justice Act 1956 and for an order that the plaintiffs pay the defendants the costs of this action including the costs of this application.

2. I also have a summons dated the 10th August 1981 taken out by the plaintiffs applying for an order that the plaintiffs have leave to amend the Writ of Summons in this action in the manner which appears in red on the copy and that reservice he dispensed with and that the period of time for service of the summons be abridged. I immediately make an order in favour of the last application, namely that the period of time for service of the summons be abridged so that I may immediately go ahead and deal with the issues raised in the two summonses.

3. The vessel mentioned in the defendant's summons was arrested on the 4th August and the affidavit to lead the warrant of arrest was sworn on the 4th August by Mark Jonathan Roberts. In paragraphs 3, 4 and 5 of that affidavit he sets out the way or ways in which sub-paragraphs (a), (b) and (c) of paragraph 7 of 0.75 r.5 were being complied with. 0.75 r.5(7) provides that every affidavit must state (a) the name, address and occupation of the applicant of the warrant, (b) the nature of the claim or counterclaim in respect of which the warrant is required and that it has not been satisfied and (c) the nature of the property to be arrested and that if the property is a ship, the name of the ship and the port to which she belongs. There is no question but that paragraph 7 of 0.75 r.5 was complied with.

4. What has been vigorously argued on these applications is the question as to whether paragraph 8 of that particular rule was complied with. In his affidavit, in paragraph 6 Mr. Roberts said:-

"As to paragraph 8(a) of the said Rule, the vessel against which this action is brought is the ship in connection with which the aforementioned claim in the action arose."

Paragraph 7 of his affidavit reads:-

"As to paragraph 8(b) of the said Rule, it is my understanding and belief that the corporation which would, apart from Section 4 of the Administration of Justice Act 1956, be liable on the said claim in an action in personam was, when the cause of action arose, the Owner of the ship in connection with which the claim arose and also, at the time of the issue of the writ the beneficial owner of all the shares in the ship against which the action is brought."

Paragraph 8(b) to which he refers in paragraph 7 of his affidavit provides:-

"every affidavit in an action in rem brought against the ship by virtue of Section 4, 4 of the Administration of Justice Act 1956 must state."

and then it goes on to set out paragraph (b). Now paragraph 7 said every affidavit must state the matters that I read out from sub-paragraphs (a), (b) and (c). This paragraph provides something additional to what is in paragraph 7 which refers to every affidavit: the additional thing is a description of the contents which must appear in every affidavit in an action in rem. Paragraph (b) provides that it must state, amongst other things, that in the belief of the deponent the person who would, apart from Section 4 of the Administration of Justice Act, be liable on the claim in an action in personam was, when the cause of action arose, the Owner or Charterer or in possession or control of the ship in connection with which the claim arose and was also at the time of the issue of the writ the beneficial owner of all the shares in the ship against which the action is brought.

5. Mr. Roberts in his affidavit in paragraph 7 stating, or implying, that he is complying with paragraph 8(b) did set out that it was his belief that, in effect, the defendant was liable in an action in personam and was the owner of the ship when the cause of action arose. Sub-paragraph (c) of that same paragraph says that that affidavit must also state the grounds of the deponents' belief: that is, so far as this matter is concerned, it must state the ground of his belief that the corporation was liable on the claim in an action in personam. In his paragraph 8, purporting to comply with paragraph (c), he only mentions the grounds why he believes that the defendant was the owner of the ship at certain times but makes no mention of the grounds for his belief that the defendant was the person liable in an action in personam at the time when the relevant cause of action arose.

6. Mr. Chan has submitted that there has been a compliance with sub-paragraph (c) because looking at the affidavit as a whole and in particular looking at paragraph 4 one can see that there is set out in substance the basis for Mr. Roberts' belief that the defendant was liable on a claim in an action in personam. However, paragraph 4 as Mr. Roberts himself says in his affidavit, is in the affidavit in order to comply with paragraph 7(b) of the Rule. Although, in paragraph 8, he purports to say that he is complying with sub-paragraph (c) of paragraph 8, he does not in fact comply with the Rule. I am unable to accept Mr. Chan's submission in relation to that.

7. 0.75 r.5(8) is a provision additional to paragraph 7 and it is operative, that is paragraph 8 is operative, whenever Section 3(4) of the Administration of Justice Act 1956 supports the action in rem. The information which paragraph 8 says must be stated in the affidavit is required in order to show how the court's jurisdiction is derived. The purpose of it is to demonstrate that the substratum of fact and law to give the court jurisdiction, that is to give it admiralty jurisdiction, exists and if paragraph 8 is not complied with, the substratum is not erected. The affidavit is deficient. Paragraph 8 is a different requirement from paragraph 7 and is an additional requirement. I hold that the deponent must state the ground of his belief for all the things that he must depose that he believes in in complying with sub-paragraph (b) of paragraph 8. There is no doubt in my mind that the first affidavit - the one that I have been referring to sworn by Mr. Roberts on the 4th August 1981 - is defective.

8. Mr. Chan has argued, however, that by virtue of 0.75 r.5(4) the court has a discretion to allow the warrant to issue and in this case of course to remain in force notwithstanding that the affidavit does not contain all the particulars that it should have contained in order to comply with paragraph 8. (There is no need for me to read paragraph 4 of 0.75 r.5 because it clearly states that). So that the question is, since it is a question of discretion, should a discretion be exercised in favour of allowing this warrant to remain in force?

9. During the course of this hearing, I have been rather dismayed at the way the plaintiffs have put their material before the court and Mr. Barretto in his submissions put before the court a very very persuasive case, a compelling case, compelling in the sense that the court felt itself looking at all the documents and actions of the plaintiffs with a great deal of suspicion. As my sympathies are with the defendants because of the way the plaintiffs have conducted their case, if there were any way in law that I could find myself able to come to a decision in favour of the defendants I would seize upon that opportunity with alacrity.

10. Mr. Barretto has launched an attack on these affidavits which I found plausible. But I am faced with this situation that the position now is that there is material before the court to found the necessary jurisdiction and since the requirements are there for the purpose of ensuring that the substratum for the jurisdiction is properly laid, then notwithstanding that the rules may not have been properly complied with in the first place, if eventually the situation is established that the jurisdiction is available, then it seems to me that I should exercise the discretion to allow the warrant to continue notwithstanding that the affidavit was defective in the way that I mentioned. In this particular case, that result is easier to arrive at than it would have been had Mr. Barretto convinced me that the situation is analogous to an ex parte injunction application. I accept Mr. Chan's submission that the analogv is not a true one. We are concerned here with a type of action which is unique, it is an action in rem and theoretically, of course, it is an action against the ship only. The judgment of Mr. Justice Willmer to which Mr. Chan referred me echoed a number of comments over the years in admiralty cases, namely, that warrants of arrest of ships are not lightly to be set aside. The reason for that is more eloquently put by Mr. Justice Willmer than I could put it but quite simply it is that it would be a regrettable circumstance if a warrant of arrest were set aside, the ship left the port and it was then found after the ship had left port, that the plaintiff had a very good case all along and was deprived of the fruits of his judgment.

11. In these cases, although drastic action, as Mr. Barretto described it, is taken in respect of a person's property on the flimsiest of evidence as in this case - nevertheless the purpose of the procedure is to enable a plaintiff who, on the face of it appears to have a claim against the owners of that ship, to gain security in the event that they do obtain judgment on their claim.

12. There is an immediate remedy available to the owners in that they can bail the ship and in a case such as this, one would think that they could readily obtain the release of it by obtaining a bank guarantee, in other words, that they could obtain the release without necessarily being very much out of pocket themselves. It is true as Mr. Chan submitted that even if at the end of the day the plaintiffs fail in their action the defendants can be compensated to some extent although as it was pointed out in one of the cases he referred me to, probably never can they be completely compensated even in costs but this is one of the general hazards of litigation.

13. The result is that I find that I must refuse the defendants' application and so I have to consider now the plaintiffs' application to amend their claim.

14. As a result of what I have said so far, it is not strictly necessary for me to say whether the alternative claim which the plaintiffs seek to add to their statement of claim, is within the sub-section 1(h) of the Act. I do think that it is. In any event, it is probably not necessary now, so far as the plaintiffs are concerned, for me to make a firm decision as to that. I do allow the plaintiffs' amendment. I grant the application for amendment, that is to allow the plaintiffs to add an alternative claim for damages in respect of the tort of inducement of breach of contract.

15. Those are all the orders that I have been asked for except the defendants' application to be awarded the costs of the defendants in the action including the costs of this application. Before I make an order on that application I will hear counsel on the matter. (Question of costs heard). I order that costs of and incidental to this application be costs in the cause.

Representation:

Mr. Edward Chan inst'd by Deacons for the plaintiffs

Mr. Ruy Barretto inst'd by Ince & Co. for the Defendants