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The Global 1
[2006] SGHC 30
| Case Number | : | |
| Decision Date | : | 20 February 2006 |
| Tribunal/Court | : | |
| Coram | : | Yeong Zee Kin AR |
| Counsel Name(s) | : | Gan Seng Chee (with Benjamin Seow) for the plaintiffs; Vivian Ang (with Yap Yin Soon), instructed by Perry Lim for the defendants |
| Parties | : | — |
|
20 February 2006 |
Judgment reserved. |
AR Yeong Zee Kin:
1. This is an application by the Defendants for leave to withdraw their appearance in this present matter. The Defendants’ main contention is that this is an in rem action and that their clients, who were the owners of the vessel Global 1 at the time the cause of action arose, ceased to be owners of the vessel at the time when the in rem writ was issued. That being the case, they argue that they ought not have entered appearance and having done so, now seek leave to withdraw their appearance.
2. After hearing counsel’s arguments, I dismissed the application and granted leave for the Plaintiffs to amend their writ from an in rem form to an in personam form under Order 2, rule 1. I now set out the grounds for my decision.
Summary of facts
3. The salient facts are as follows. The Defendants Global Shipping Co Ltd were, at the time the cause of action arose, the owners of the vessel Global 1. The Plaintiffs Chemical Industries (Far East) Ltd were shipping a cargo of liquid caustic soda onboard the vessel from India to Singapore. The cause of action arose sometime in November or December 2002.
4. On 9 October 2003, before the issue of the present writ, there was a change of ownership of the vessel; the new owners are Shinhan Capital Co Ltd and the vessel was renamed Ace 1. The present writ was issued on 18 November 2003 and the Statement of Claim was filed on 21 April 2005. The Defendants were served the writ on 9 July 2004; they entered appearance on 13 July 2004.
5. Parties did not realise that there was a change of ownership of the vessel until sometime in September 2005. This can be explained by considering that the defence is conducted by the American Steamship Owners Mutual Protection and Indemnity Association Inc, the Protection and Indemnity Club that the Defendants are a member of. On 13 October 2005, the Defendants’ solicitors wrote to the Plaintiffs’ solicitors on this issue and suggested suspending the proceedings temporarily in order to take legal advice on their respective legal positions. This request was turned down.
The issues
6. During arguments, the Defendants framed the issue thus: As the writ was an in rem writ, the Plaintiffs had to fulfil all the conditions in s 4(4) of the High Court (Admiralty Jurisdiction) Act; and since the Defendants were not the beneficial owners of all the shares in the vessel at the time the writ was issued, they were not the proper party to the present proceedings. This being the case, the Defendants were not a proper party and that their appearance should be withdrawn.
7. The Plaintiffs’ approached the matter in the following manner. An in rem writ had both an in rem and an in personam component. Even if the Defendant was not liable in rem, the Plaintiffs argue that the Defendants were liable in personam and that the action should proceed on the in personam component of the in rem writ.
8. As I see it, the issues ought to be characterised as follows:
(a) Does the High Court have admiralty jurisdiction in this matter; and
(b) If so, whether the admiralty jurisdiction of the High Court was properly invoked.
The law
Admiralty jurisdiction
9. Section 3 of the High Court (Admiralty Jurisdiction) Act sets out the admiralty jurisdiction of the High Court. The relevant subsection for the present case is subsection (g), as the claim is for loss of or damage to goods carried in a ship.
10. Section 4 of the High Court (Admiralty Jurisdiction) Act sets out how admiralty jurisdiction may be invoked. Generally, the admiralty jurisdiction of the High Court may be invoked either in personam or in rem. Section 4(1) states that ‘the admiralty jurisdiction of the High Court may in all cases be invoked by an action in personam.’
11. Apart from in personam jurisdiction, the High Court has in rem admiralty jurisdiction. Section 4 proceeds to set out three situations where admiralty jurisdiction may be invoked in rem:
(a) Where the claim relates to possession or ownership of a ship, disputes between co-owners over possession, employment or earnings of a ship, mortgage or charge on a ship, forfeiture or condemnation of a ship or goods carried onboard, restoration after seizure or droits of admiralty: s 4(2);
(b) Where there is a maritime lien on a ship: s 4(3); or
(c) Where there is a statutory right of action in rem or statutory lien (per GP Selvam JC in The Bolbina
In the case of any such claim as is mentioned in section 3 (1) (d) to (q), being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of the action arose, the owner or charterer of, or in possession or in 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; or
(b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid.
12. In order to invoke in rem jurisdiction under s 4(4), the claimant must satisfy all the conditions set out in that sub-section:
(c) The claim must be one under s 3(1)(d) to (q);
(d) The person liable to the claim in personam was the owner or charterer of or in possession or control of the ship when the cause of action arose; and
(e) All the shares in the ship (or sister ship) are beneficially owned by that person at the time the action was brought.
Invocation of admiralty jurisdiction: form and service
Form of an in rem and in personam writ
13. The Rules of Court sets out further details regarding how in rem and in personam jurisdiction is to be invoked. Order 70, rule 2(1) prescribes the form that an in rem writ should take. Order 70, rule 2(2) prescribes that the form of an in personam writ should follow the general writ form, except that ‘the words “admiralty action in personam” must be inserted above the space for the number of the writ.’ A perusal of the in rem form and the general writ form would show that these forms are largely similar except for the following:
(a) In an in rem writ, the words ‘Admiralty in Rem’ appears in the title of the action’ while an in personam writ shoud contain the words ‘Admiralty Action in Personam’; and
(b) The parties in an in rem writ are described in their capacity as ship owner or cargo owner, etc—in other words, they are described generally and not named; in an in personam writ, the parties are specifically named.
Service of an in rem writ and in personam writ
14. An in personam writ, as with any writ in general, has to be served personally on the Defendant: O 10, r 1. An in rem writ, on the other hand may be served either one of the following manner:
(a) Service may be ‘on the property against which the action is brought’ (ie the ship) under O 70, r 7(1). In this case, service would be effected by the Sheriff or his officer under O 70, r 7(3). Service of the in rem writ on a ship would be effected by affixing it ‘for a short time on any mast of the ship or on the outside of any suitable part of the ship’s superstructure’ and thereafter, removing the writ and leaving a copy of it affixed ‘on a sheltered, conspicuous part of the ship’: O 70, r 10(1).
(b) Alternatively, the in rem writ may be served on the Defendants’ solicitor who endorses on the writ a statement that he accepts service on behalf of the Defendant or the Defendants enters an appearance in the action without being duly served. In both of these cases, ‘the writ is deemed to have been duly served on the defendant by virtue of Order 10, Rule 1 (2) or (3)’: O 70, r 7(2)
15. One crucial distinction must be noted in the different modes of service of an in rem writ described above. Service of the writ ‘on the property against which the action is brought’ by affixing it on the ship invokes the admiralty jurisdiction of the High Court against the res. On the other hand, where the Defendants’ solicitors in rem writ is served on the Defendants’ solicitors, or where the Defendants enter an appearance without being duly served, the writ is deemed to be duly served on the defendant. In the latter case, the admiralty jurisdiction of the High Court is invoked on the Defendant, ie in personam.
The difference between in rem and in personam admiralty jurisdiction
16. The difference between in rem and in personam admiralty jurisdiction may be best understood by considering the subject matter that the jurisdiction latches upon. The in rem jurisdiction latches onto the res and is essentially a claim against property. It follows that if admiralty jurisdiction is invoked only against a ship, the Plaintiffs’ claim can only be satisfied to the value of the ship.
17. In personam admiralty jurisdiction on the other hand latches onto the Defendant personally. Once properly invoked, the Defendant is liable for the full extent of the Plaintiffs’ claim.
18. Where the form of the writ is an in personam writ, there is little room for confusion that the admiralty jurisdiction is invoked against the Defendants personally. An in rem writ has both an in personam and an in rem component: ‘the English admiralty action in rem is not a pure action in rem for it contains latent elements of actions in personam’ per GP Selvam JC in The Bolbina
19. Where the writ is an in rem writ, a careful consideration of service is necessary in order to understand how and against what or whom the High Court’s admiralty jurisdiction is invoked. There are three possible scenarios:
(a) The in rem writ is served on the ship and the ship owners do not enter an appearance;
(b) The in rem writ is served on the ship and the ship owners proceed to enter an appearance; and
(c) The in rem writ is not served on the ship but the ship owners’ solicitors accepts service or they enter an appearance thereby waiving service.
20. The effect of the first two scenarios are amply summarised by LP Thean JA in The Fierbinti
It seems to us that the distinction between service of the writ on the res and deemed service of the writ on the defendant is inevitable in an admiralty action in rem. An action in rem once commenced against the ship is an action against the ship itself and continues as such even though it may also be an action in personam against the owner thereof. If the owner does not enter an appearance and the judgment is obtained, the judgment is enforceable only against the ship and to the extent of the value of the ship. If, however, the owner enters an appearance the action will continue as an action in rem against the ship and an action in personam against the owner, and if judgment is obtained it is enforceable against the ship and also against the owner to the full extent of the judgment: see The Gemma, at pp 291–292; The August 8, at p 456, and The Kusu Island, at pp 260–261. It has been held in The Kusu Island that although an action in rem is one against the res, the defendant to the action is the owner of the res and not the res itself: see pp 261–262.
21. Hence, where the in rem writ is served on the ship and the ship owners do not enter an appearance, the claimant can only look to the ship for satisfaction of his claim. Whereas in the situation where the in rem writ is served on the ship and the ship owners proceed to enter an appearance, both in rem and in personam components of the writ are invoked and the claimant can look to both ship and ship owners for satisfaction of his claim.
22. In The Fierbinti, the plaintiffs took out an in rem writ against the defendants and named 19 ships on the writ. Eventually, the defendants’ solicitors accepted service and entered appearance for The Fierbinti one of 19 ships named in the writ. However, the plaintiffs proceeded to arrest The Mehedinti, another of the 19 ships named. To further complicate the matter, there had been a change of ownership in The Mehedinti since the issue of the writ. One of the issues the Court of Appeal considered was whether in rem admiralty jurisdiction had been invoked by service on the defendants and their entry of appearance. LP Thean JA opined, at p 872:
Reverting to the facts in this case, we do not think that the appearance so entered by the defendants’ solicitors has any effect or significance at all on the issue whether or not the in rem jurisdiction has been invoked against the Fierbinti. The effect of the entry of appearance was that thenceforth the action, which started as an in rem action, would proceed and continue as an action in personam against the owners of the Fierbinti, but as the writ has not been served on the ship the in rem character of that action remained. In this connection, we find of assistance the case of The Lloydiana. There, the plaintiffs took out a writ in rem against the defendants in respect of the wet damage and short delivery of their cargo of sugar laden on board the Fair Liza. The bills of lading for the carriage of the cargo were issued by the defendants and they were described as carriers. But the Fair Liza was chartered to another company, Nigerian National Shipping Line. The defendants’ vessel Lloydiana was expected to arrive in London and the plaintiffs’ solicitors threatened to arrest her. To avoid the arrest, the defendants through P and I Club provided a guarantee. But Fair Liza was not a sister ship of Lloydiana and the plaintiffs could not have an action in rem against the latter. The writ was served on the solicitors for the defendants. Subsequently, the defendants applied to court for an order that the writ be struck out and the service of the writ be set aside. The application was dismissed as the court held that it had jurisdiction to hear and determine any claim for loss or damage to goods in a ship. This was grounded on the fact that the solicitors for the defendants had accepted service and it was therefore unnecessary to proceed in rem, and the action thenceforth proceeded as one in personam, although it was commenced as an action in rem. Sheen J said, at p 318:
In this case, the defendants instructed solicitors to accept service of the writ. It was unnecessary to serve the ship and arrest her. Put in another way, it was unnecessary to proceed in rem. The action has proceeded as an action in personam against Lloyd Triestino, whose solicitors agreed to accept service. They have done so and they have acknowledged service.
For the reasons we have given, we cannot subscribe to the view that, where an action in rem is commenced, the in rem jurisdiction is invoked when there is a “deemed” service of the writ on the defendants. In our judgment, in this case, the in rem jurisdiction has not been invoked against the Fierbinti.
23. The Court of Appeal’s answer deals with our third scenario. In essence, where the in rem writ is served on the Defendants, the in rem admiralty jurisdiction is not invoked but the in personam jurisdiction is. Hence, the action, although commenced as an in rem action, proceeds as an in personam action against the Defendants.
The present case
Does the High Court have admiralty jurisdiction in this matter
24. The present action is brought by the cargo owners against the owners of the ship for contamination of their cargo of liquid caustic soda. This is a claim for damage to goods carried in a ship under s 3(1)(g). It is not disputed that the High Court has admiralty jurisdiction in this matter. Neither is it disputed that the Defendants are the proper party in an in personam by the Plaintiffs.
Whether the admiralty jurisdiction of the High Court was properly invoked
Whether in rem or in personam jurisdiction invoked
25. In the present case, the writ was an in rem writ taken out on the basis of a statutory lien or statutory right of action in rem. That being the case, the Plaintiffs had to fulfil the statutory requirements of s 4(4) of the High Court (Admiralty Jurisdiction) Act. The Defendants were the owners of the ship at the time the cause of action arose, but by the time the writ was issued, the ship had changed ownership. This being the case, the Plaintiffs could not properly invoke admiralty jurisdiction in rem.
26. The question that follows then is did they attempt to do so? They took out an in rem writ. However, it was not served on the ship nor was the ship arrested. Service of the writ was on the Defendants’ solicitors and an appearance was duly entered. Putting aside the question of whether the writ should have been in the in rem or in personam form, the acceptance of service by its solicitors on its behalf and the entry of an appearance by the Defendants resulted in the invocation of the in personam admiralty jurisdiction of the High Court. Further, by not serving the writ on the ship or arresting the ship, the Plaintiffs elected not to invoke the in rem admiralty jurisdiction of the High Court.
27. To my mind, the present action is in substance an in personam action. In rem jurisdiction was never invoked, notwithstanding the form of the writ. Had the Plaintiffs attempted to invoke in rem jurisdiction, they would have failed for failure to fulfil the requirements of a statutory lien; but they are always entitled to invoke in personam admiralty jurisdiction. In other words, although commenced as an in rem action, in rem admiralty jurisdiction was never invoked and this action proceeded in personam.
Effect of using the wrong form
28. I turn now to the question of the form of the writ. By taking out an in rem writ, the Plaintiffs attempted to institute an in rem action; but an in rem action has both an in rem and an in personam component. While they may have started out intending to invoke the in rem admiralty jurisdiction of the High Court by taking out an in rem writ, the fact of the matter is that they elected to invoke only the in personam admiralty jurisdiction. The in rem component of the writ was never invoked. The present action was in substance conducted as an in personam action from the moment the writ was served on the Defendants’ solicitors who accepted service of the writ on their behalf and entered appearance.
29. In The Ohm Mariana
Further, even if the action in rem was instituted in error on the ground that, when the cause of action arose, the respondents were not the owners of Ohm Mariana, that error was not fatal to the appellants’ claim at the trial. As we have held, the claim of the plaintiffs came within para (o) of s 3(1) of the Act, and the court has jurisdiction to hear and determine the claim. The defendants had not, at the initial or any subsequent stage of the proceedings, applied to set aside the writ and the warrant of arrest. They entered an appearance unconditionally and in so doing submitted to the jurisdiction of the court and from then onwards the action continued as an action in rem as well as an action in personam: see The Gemma and The August 8. …
Accordingly, at the time the action came before the learned judicial commissioner, it was an action in personam as well as an action in rem. Assuming that the action in rem was wrongly instituted, the action in personam was clearly maintainable on the point of jurisdiction. There was no impediment to the plaintiffs bringing an action in personam against the defendants making the same claim as was made in this action. Equally, we can see no impediment to the action continuing as an action in personam. The subject matter of the claim was before the court and the court had jurisdiction to hear and determine it.
30. Similarly in our case, the Plaintiffs may have begun by attempting to institute an in rem action by taking out an in rem writ. However, the in rem jurisdiction was never invoked. The action was conducted as an in personam action. It cannot be disputed that the High Court has in personam admiralty jurisdiction. Hence, the Plaintiffs’ action is clearly maintainable.
31. In the circumstances, the only question left to be addressed is what of the in rem writ? Having arrived at the conclusion that the Plaintiffs are not entitled to invoke in rem admiralty jurisdiction and that the action was in substance an in personam action, it would be remiss to allow the writ to continue in the form it is presently in. In The Bradmayne
In my opinion an action which has been commenced as an action in rem continues until its termination as an action in rem unless it undergoes some alteration in its character by amendment, by order of the Court, or under the rules of Court. [Emphasis mine.]
32. Under O 2, r 1(1), failure to comply with the requirements of the Rules in respect of form is an irregularity which shall not nullify the proceedings. The Court is empowered under O 2, r 1(2) to exercise its powers to allow such amendments to be made and to make such order dealing with the proceedings generally as it thinks fit. In exercise of these powers, I granted leave to the Plaintiffs to amend the form of their writ to an in personam form in order that the form of the writ coincides with the substance of the action. Given that the only difference between the in rem and in personam forms are in the description of the parties and nature of the action in the title of the action, I directed that the writ be amended to specifically name Chemical Industries (Far East) Ltd as the Plaintiffs, to specifically name Global Shipping Co Ltd as the Defendant, and to replace the words ‘in rem’ with ‘in personam’ in the title of the action.
33. Although the present application was one for leave to allow the Defendants to withdraw their appearance, it was necessitated by the Plaintiffs’ error in instituting an in rem action. An in rem action is not maintainable although an in personam one is. An amendment for the purpose of altering the action from an in rem action to an in personam action would have been necessary. That being the case, consequential directions for amendments were made and costs of $8,000 was awarded to the Defendants.
Defendants’ application is dismissed.
Copyright © Government of Singapore.
This judgment text has undergone conversion so that it is mobile and web-friendly. This may have created formatting or alignment issues. Please refer to the PDF copy for a print-friendly version.
Version No 0: 20 Feb 2006 (00:00 hrs)