Equitable set off – Admiralty Court having no jurisdiction to grant
Rum was imported to Liverpool from Havana. The importer as consignee and owner of the cargo, instituted action in rem against the vessel.
The shipowners sought to raise a defence of set off in respect of the short payment of freight.
Dr Lushington found that the statute granting the Admiralty Court jurisdiction in respect of cargo claims, did not extend that jurisdiction to counterclaims falling outside the specified grounds of jurisdiction in the Act.
This case presents the converse position to the other cases in this section where the main claim has always been freight and the counter claims damage to the cargo.
The reasoning of Dr Lushington is sound as the claim for freight was regarded as a separate and distinct claim. If it were regarded as “pure defence”, the Admiralty Court should properly have had incidental jurisdiction to adjudicate upon the validity of such defence.
The facts of this matter, however, do not lend themselves to such a solution as the short payment of freight could hardly have had anything to do with the damage to the oranges.
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