Proceedings in rem – properly brought by issue of writ and not affected by subsequent change of ownership of the vessel
The facts
In November 1966, the plaintiffs, cargo owners, issued a writ in rem against the owners of the vessel, Smith Rederi Aktiebolaget, claiming damages for breach of contract .
In January 1967, the ship owners sold the ship to the defendants, Rederi Aktiebolaget Tankoil, who renamed her the Monica S.
On 9 February 1967, the writ was amended to reflect the changed details.
Tankoil applied for an order setting aside the amended writ or service of it.
Findings
Brandon J held that the change of ownership of the ship after the issue of the writ in rem but before service or arrest did not defeat a statutory right of action in rem under the Administration of Justice Act, 1956.
The Administration of Justice Act, 1956 read:
1(1) The Admiralty jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear and determine any of the following questions or claims—
… (c)any claim in respect of a mortgage of or charge on a ship or any share therein; …
(g)any claim for loss of or damage to goods carried in a ship;
(h)any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship; …
(4) The preceding provisions of this section apply—
… (c) so far as they relate to mortgages and charges, to all mortgages or charges, whether registered or not and whether legal or equitable, including mortgages and charges created under foreign law …
3 … (2) The Admiralty jurisdiction of the High Court may in the cases mentioned in paras. (a)to (c)and (s) of sub-s. (1) of s. 1 of this Act be invoked by an action in rem against the ship or property in question.
(3) In any case in which there is a maritime lien or other charge on any ship … for the amount claimed, the Admiralty jurisdiction of the High Court may be invoked by an action in rem against that ship …
(4) In the case of any such claim as is mentioned in paras. (d) to (r)of sub-s. (1) of s. 1 of this Act, being a claim arising in connexion with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or control of, the ship, the Admiralty jurisdiction of the High Court may (whether the claim gives rise to a maritime lien on the ship or not) be invoked by an action in rem against-
–(a) that ship, if at the time when the action is brought it is beneficially owned as respects all the shares therein by that person … ”
Brandon J rejected the argument by Tankoil that, although the action had properly begun, it could not properly be continued after the transfer of ownership.
The submission of Tankoil was based not on the wording of the Act but on the contention that the Act was declaratory of existing law which required arrest for exercise of the right of action.
This argument made it necessary to examine cases from 1864 onwards.
The historical background was as follows. Statutory rights of action in rem were first created by the Admiralty Court Act, 1840. Such rights were given by s 6 in respect, first, of claims for towage, and, secondly, of claims for necessaries supplied to foreign ships, whether within the body of a county or on the high seas. Further rights of the same kind were created by the Admiralty Court Act, 1861.
Such rights were given by s 4 in respect of claims for building, equipping or repairing a ship, if at the date of institution of the cause the ship or its proceeds were under arrest of the court.
By s 5 in respect of claims for necessaries supplied to any ship elsewhere than in the port to which she belonged, unless at the time of institution of the cause any owner or part-owner was domiciled in England or Wales.
By s 6 in respect of claims by holders of bills of lading of any goods carried into any port in England or Wales for damage to such goods, subject to the same proviso as to domicile of any owner or part owner.
By s 10 in respect of master’s claims for disbursements.
Section 33 further provided that the jurisdiction of the Admiralty court could be exercised either in rem or in personam.
The procedure of the High Court of Admiralty from 1859 until 1874 was governed by the Rules, Orders and Regulations of the High Court of Admiralty, 1859.
The effect of these rules was that a cause was instituted by having the cause entered in the cause book.
Then, if the cause was in rem, a warrant for the arrest of the res was taken out, and thereafter served and executed, after which the cause could proceed.
In practice, arrest followed very soon, usually within one or two days, of institution of the cause, and there was not then any separation between service of process on the one hand and arrest on the other, both being in effect carried out simultaneously.
As a result of the Supreme Court of Judicature Acts, 1873 and 1875, the jurisdiction of the High Court of Admiralty was transferred to the Probate, Divorce and Admiralty Division of the High Court. The procedure in Admiralty causes was further modified by rules scheduled to the Acts of 1873 and of 1875.
These rules provided that all actions (formerly causes) should be begun by writ: the old Admiralty rules remained in force except where expressly varied.
The result was a hybrid form of procedure, in which an Admiralty action in rem was begun by a document which was a cross between a writ and a warrant of arrest.
Under that procedure, the previous system in Admiralty actions in rem, whereby service of process and arrest were combined in one operation, remained in force for the time being. This state of affairs continued until October, 1883, when the Rules of the Supreme Court, 1883, came into force, repealing all the old rules of the High Court of Admiralty.
The new rules for the first time separated service of process from arrest.
Tankoil relied on textbooks: Halsbury, Carver and Maclachlan.
“By way of vintage counterblast”, junior counsel for Cargo, John Hobhouse, referred to Williams & Bruce’s Admiralty Practice.
In keeping with tradition, Brandon J pointed out that the statute and decided cases took preference over academic writing.
Tankoil’s reliance on principle was also rejected by the court: mere timing could make no difference to the effect of the remedy which was the same: the ship owner could execute against a chattel.
Recourse to practical difficulties was also rejected: if a statutory right of action in rem became effective as from date of issue of writ, without service or arrest, a would-be purchaser of a ship would have to reckon with the possibility of numerous claims having already attached to the ship without his having notice of them.
The answer was that a purchaser always had to reckon with the possibility of maritime liens. In practice, a purchaser took an indemnity from his seller against claims which attached prior to the sale.
Brandon J held that the preponderance of authority coincided with the natural meaning of the statute: once the action commenced or was brought, change of ownership of the vessel was irrelevant. The authorities relied on were the Heinrich Bjorn 1886 and the Beldis 1935.
Discussion
This case, involving high quality practitioners, if properly applied, should have led to a different result in the Mare Traveller.
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