Mobil Oil Hing Limited v. The Owners of the Vessel "Hua Lien" and Another

HCAJ000289/1983

The claim of a company which had performed work at direction of a salvor was ordered to rank pari passu in priority with the claim of the salvor.

Application by a volunteer to have certain docking expenses ranked for priority as bailiff 's expenses. Court held:-

The Court observed that any person intending to take it upon himself to do anything, which might otherwise have had to be undertaken by the bailiff, should, if he considers that he is entitled to be indemnified, forthwith apply to the Court for an order that the expenditure is to be regarded as bailiff's expenses.

Admiralty action in rem against the vessel: ''HUA LIEN"

BETWEEN

Coram: Hon. Power, J.

Date of Hearing: 31st July 1984.

Date of Delivery of Judgment: 1st August 1984.

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JUDGMENT

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1. I am asked to determine priorities in this matter. It concerns the vessel "Hua Lien" a car ferry and cargo vessel of Taiwanese registry. This vessel was damaged and was towed to Hong Kong from Taiwan in the first half of 1983 in order that repairs could be carried out upon it by Hong Kong United Dockyards Limited. These repairs were being done in September 1983 when, because of the approach of typhoon Ellen, the vessel was, as a typhoon precaution, towed from where she was berthed at Hongkong United Dockyards and moored in the harbour. She was during the typhoon driven aground onto the shore of Tsing Yi Island immediately adjacent to the Mobil Oil installation. She did extensive damage to the Mobil Oil pier prior to being driven aground.

2. The salvage operations in relation to the vessel were began by China Pacific S.A. on the instructions of the owners. It is said that the work commenced on 13th September but there is nothing in the affidavits which indicates what exactly was done on that date or on the days immediately following. China Pacific, it appears, intended to secure the vessel by fixing mooring lines to rocks on the foreshore. China Pacific say, but this is disputed, that they were, on 14th September, refuses! permission so to do by Mobil Oil. Captain Brooking, the representative of Mobil Oil, said that, after he had made his inspection, he considered that the salvors were dilatory, did not consider that the proposed fixing of mooring lines to the rocks would be adequate and proposed that mooring lines should be fixed to concrete blocks. These concrete blocks were not at the "Mobil Oil site but would have had to be brought there for this purpose.

3. Captain Brooking set 12 noon on 17th September. as the deadline for China Pacific to do something. The position was set out in a telex dated 17th September:-

"We refer to our clients' Captain Brooking's telephone conversation with you at approximately 9.35 a.m. this morning in which he indicated our clients' grave concern about the present condition of the "Hua Lien" and that, notwithstanding that more than one week has passed since the casualty, no steps have been taken to secure the vessel at her present position in a seaman like fashion. Similarly no steps have been taken to remove or secure the anchor chain straddling what remains of our clients' pier. Our clients' Captain Brooking has indicated that for safety and security considerations the present situation cannot be allowed to continue.

In these circumstances we confirm that our clients indicated to you that unless they receive from you and/or your salvors by 12.00 noon today, a clear and satisfactory indication that steps will be taken urgently to secure the position, they will be taking the matter into their own hands and appointing contractors themselves to undertake the securing of the vessel and the removal of the anchor chain. Our clients' intention is obviously to minimise any further damage which might be sustained by their facility, and in .view of the inactivity of the owners/salvors to date, they consider that they have no alternative but to take this course. The cost of doing so will of course be a part of their claim against the ship and/or third parties.”

4. That telex elicited a reply from Mr. Stevens, representing the owners, who said, inter alia:-

"We have just heard that Mobil have instructed Selco Salvage to remove the cable and secure the ship. We take the view and shall so advise our clients that this is being done purely on a voluntary basis and that your clients will have to prove that their action in this regard is reasonable if they wish to recover any proportion of the costs incurred from our clients. Bearing in mind that we telephoned you this morning to let you know that the present salvors would begin the work, in association with your superintendence, at 1400, we think your clients are being unreasonable."

No doubt, the representatives of Malayan, Selco and Mobil can sort the matter out on site this afternoon."

5. It is to be noted that the conclusion that the owners had drawn from what had occurred was that Mobil intended not only to secure the ship but to remove the cable. The owners indicated, quite clearly that, if Mobil did this, it would be regarded by them as having been done upon a voluntary basis. However, the cable ends by saying that the matter could be sorted out on site that afternoon, i.e. the afternoon of 17th September.

6. At 6.30 on that afternoon, pursuant no doubt to the telex which I have just read, Captain Brooking met with certain parties at the site. He described this meeting in paragraph 20 of his affidavit as follows:-

"At 1830 I met with Captain Villena who told me (I quote from my notebook) that 'I have just learnt you have a contract with Selco to do the work'. I replied to the effect that we had, but that it was a contingency plan in the event only that the salvors themselves took no action. To this Captain Villena replied: 'Now I see, in that case we do nothing more you have a contract with Selco, they can do the rest'. With that Captain Villena walked off and returned to his salvage tug lying alongside."

7. The suggested position, at 6.30 p.m. on the evening of 17th, was that Mobil were preventing the salvors from doing the salvage work in the way which they proposed it should be done and that Mobil were faced with the indication from the owners that if Mobil did the work in which they suggested it should be done they would be treated as volunteers. I think it fair to comment that, if the intention of the salvors to a fix lines to the rocks really existed, there must be some doubt as to how firm it was. I say this because this intention was not pursued with the Marine Department who, it seems clear, would have been the appropriate persons to consult as to the use of the foreshore, which is Crown land, in the securing of the vessel. There was, it would. seem, nothing further done after raising the matter with Nobil and having Mobil indicate that they would not agree to the work.

8. The matter did not conclude with the events of the 17th September for, on the next day, the 18th September, Captain Brooking tells us, in paragraph 23 of his affidavit, that the following events occurred:-

"On 18th September at 0630 I was telephoned by Captain Patterson who told me to proceed with Selco. At 0815 I arrived at Tsing Yi Terminal and the operation for securing of the vessel commenced. By 1800 the two mooring clumps, each clump consisting of 4 x 18 ton blocks, suitably secured by heavy wire and shackles were positioned fore and aft of the vessel and at 1840 I informed Mr. Briggs, duty officer at the Marine Department, that the vessel was now properly secured."

9. I am satisfied from this evidence that Mobil only proceeded after being told so to do by Captain Patterson of China Pacific.

10. Mr. Mumford submits that even so they should not recover the cost as the work was not done for the preservation of the vessel and it was done prior to the work of China Pacific and must, therefore, rank thereafter. I do not tare that view. Whatever the motive of Mobil the work was an integral part of the work of China Pacific and must be regarded as such. Neither the motive nor the time of completion changes this. This is not the position that obtained in "The Veritas" (1901) P.304 where there were two salvors whose work was completed at different times.

11. The work done by Mobil was, as I have said, an integral part of the work of China Pacific. It was, I ,am satisfied, as was submitted by counsel, part and parcel of that work. Mobil is, therefore, entitled to rank pari passu with China Pacific.

12. There are two other claims. One for the cost of an anchor that was supplied by Yau Wing Ship Building Co. and one for mooring costs incurred with Hongkong United Dockyards between 5th and 21st January 1984. Mr. Ma who appears for both those interest submits that the Court should regard both as bailiff's expenses.

13. The claim as regards the chain rests upon the basis that the interested parties including the Marine Department but not the bailiff, agreed that the vessel should be supplied with this chain. I do not consider it necessary to go into the question as to whether this was necessary for the safety of the vessel. I am satisfied that the bailiff never ordered the chain and that he never authorized any expenditure thereon. I am not swayed by the suggestion that, as the Marine Department agreed that the chain should be supplied, "policy" demands that it should be recognized as a bailiff's expenses. It may well be that the supplier of the chain was the supplier of a necessary one that might have eventually made the ship more secure when it was moored in the harbour. This is not, however, sufficient to require that it be ranked as a bailiff's expense and I am not prepared to so order.

14. The other clam is more involved. By 10th October the vessel was refloated and the Marine Department, after survey, found that she was in a satisfactory afloat condition. On 11th October she was moved to a mooring at HongKong United Dockyard and on 12th October a redelivery certificate was signed by salvors and the owners.

15. The vessel was by this time under the custody of the bailiff, it having been arrested on 29th September. The vessel had been a danger to shipping when it was off the Mobil site at Tsing Yi and the bailiff was anxious that it be moved to a safe mooring and he agreed to the proposal of the owners that it go back to Hongkong United Dockyards so that repairs could continue. The Marine Department were also happy with this course. This was not, I emphasize, done at the direction of the bailiff. He very properly acquiesced in a course proposed by the owners and Hongkong United Dockyards which would have the effect of increasing the value of the arrested vessel. The owners were acting in their own interest as, indeed, was HongKong United Dockyards.

16. The owners abandoned the vessel late in 1983 and it lay thereafter at the Hongkong United Dockyards berth. It remained there until 21st January when it was able to be moved to a mooring. It is for the mooring fees and certain work done during the period from 5th to 21st January that Hongkong United Dockyards now make their claim. It could not be moved immediately after it had been abandoned by the owners because the Marine Department would not permit it. This was not because of any direction from the bailiff. Vessels under arrest are subject to the lawful orders of the Marine Department as are all other vessels.

17. The vessel, had the owners and the Hongkong United Dockyards not wished it to be moved for their own purposes, would have been ordered by the bailiff to be moored as cheaply as possible consistent with compliance with the lawful directions of the Marine Department. I emphasize that the position that came to exist in January existed only because it had been created by Hongkong United Dockyards and the owner. If they had never created such a position, it would be difficult to make a realistic estimate as to what might have occurred. It is, however, not unlikely that the vessel would have been sold pendente lite at a very much earlier stage.

18. This court must be slow, as I have observed in other applications, to order that expenses voluntarily undertaken by an owner or a third party to repair or, indeed, supply a ship should be regarded as bailiff's expenses.

19. Mr. Mumford rightly points out that while the vessel may be in the custody of bailiff it is not, by reason of the fact of the arrest, in his possession. In the present case it cannot be suggested that the bailiff reduced it into his possession until after 23rd January.

20. The bailiff is under no duty except to keep the vessel secure within the jurisdiction. It is true that he is authorized by the omnibus order, which in this case was made on 6th October 1983, to take measures to preserve the vessel, to move the vessel within the limits of the port and to supply minimum victuals and food to avoid hardship.

21. If anyone intends to take it upon himself to do anything, which might otherwise have had to be undertaken by the bailiff, he should, if he considers that he is entitled to be indemnified, forthwith apply to the court for an order that the expenditure is to be regarded as bailiff's expenditure.

22. There may be exceptional circumstances where it would be proper to order, at a later date, that certain expenses should be regarded as bailiff's expenses but they are exceptional and a volunteer, who for reasons of his own pays out moneys for repair or upkeep of a vessel, must establish the existence of such circumstances.

23. The real contention of Mr. Ma. it seems to me, is that the Court should find for reasons of policy that the circumstances obtaining in the present case were exceptional circumstances. This argument is based, in the main, upon the fact that the Marine Department would not allow the vessel to leave Hongkong United Dockyards during the period up until 21st January. This is true, but I again point out that it occurred not because of any order by the bailiff but because of the action of the owners and Hongkong United Dockyards who, together, placed the vessel in H.U.D.'s dockyards. The position was created by them not by the Marine Department and certainly not by the bailiff. The position from which HongKong United Dockyards had to extricate itself after the owners abandoned the vessel was one which, in part at least, was of its own making. I do not consider, in those circum-stances, that it would be proper to order that the expenses it incurred should be regarded as bailiff's expenses. That application is also refused.

24. Each party's costs are to be recoverable as his costs in the action.

25. The priorities are determined as follows. The bailiff's expenses are to rank first in priority. Mobiloil Hong Kong Ltd's costs in the action up to time of sale are to rank thereafter. The claims of China Pacific S.A. and Mobiloil Hong Kong as salvors are to rank pari passu.

26. Finally the claims of Hongkong United Dockyards and Yau wing Ship Building Co. are to rank as suppliers of accessories. In each case costs are to rank with their claim.

27. Amounts in each case to be agreed by solicitors with liberty to apply.

28. $1.3 million is to be paid forthwith to China Pacific S.A. upon application to Admiralty Registrar.

Representation:

Mr. William Stone (J.S.M.) for Plaintiff.

Mr. Mumford (Crump & Co.) for Caveators.

Mr. G. Ma (Baker t4 McKenzie) for Interveners.

Mr. K.Y. Lee, Asst. Chief Bailiff.