"Stolt Kestral" (Owners of the Vessel) v "Niyazi S" (Owners of the Vessel) [2014] EWHC 1731 (Admlty)

Case No 2012-1328Case No 2013-1622Neutral Citation Number: [2014] EWHC 1731 (Admiralty)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 23/05/2014
Before
MR JUSTICE HAMBLEN
Between
The Owners of the vessel “Stolt Kestral”ClaimantThe Owners of the vessel “Niyazi S”Defendant
Miss V Selvaratnam QC (instructed by MFB Solicitors)) for ClaimantMr Richard Sarll (instructed by Holman Fenwick Willan) for DefendantHearing Hearing dates: 9 May 2014
JudgmentMr Justice Hamblen :Introduction
[1]The present applications arise out of a collision between the Claimants’ vessel “STOLT KESTREL” and the vessel “NIYAZI S” (“the vessel”) on 10 October 2010 at Stanlow, near the Port of Liverpool, England. At the time of the collision the vessel was owned by Sener Petrol Deniscilik Ticaret AS (“the Defendant”).[2]The Claimant issued an in rem Claim Form on 9 October 2012.[3]By an application (Application 1) dated 3 October 2013 the Claimant made an application on papers for an order extending the validity of the Claim Form by 8 months and an order for permission to serve the Claim Form out of the jurisdiction. An Order to this effect was made by Eder J on 8 October 2013.[4]By a further application (Application 2) dated 10 December 2013 the Claimant applied on papers for permission to amend the Claim Form to add four sister ship defendants and an 8 month extension of time for service of the amended Claim Form. An Order to this effect was made by Flaux J on 23 January 2014.[5]On 11 December 2013 the Claimant issued an in personam Claim Form.[6]By an application (Application 3) dated 13 December 2013 the Claimant applied for an order for an extension of time for commencing the in personam proceedings and for permission to serve the Claim Form out of the jurisdiction.[7]By a cross application (Application 4) dated 4 March 2014 the Defendant applied for(1) orders setting aside (i) each of the Orders extending the validity of the in rem Claim Form previously granted to the Claimants by Eder J and Flaux J (ii) that part of the Order of Flaux J giving permission to add the sister ships, and(2) a stay of the in personam claim on the grounds that it is time barred.[8]The present hearing involves the determination of Applications 3 and 4.

Factual background

[9]On 10 October 2010 the “STOLT KESTREL” was moored port side to alongside at Stanlow.[10]At 03:32 on 10 October the “STOLT KESTREL” was struck by the vessel and sustained structural damage to the starboard side between frames 33 to 105.[11]On 30 October 2010 an LOU was issued by the Defendant’s P&I Club, The Standard Club, in favour of the Claimant in the sum of US$300,000 inclusive of interest and costs. The LOU did not address the issue of jurisdiction.[12]On 11 January 2011 quantum documents were provided to The Standard Club by the Claimant’s P&I Club, Gard.[13]On 5 June 2012 the vessel was sold by the Defendant to Delmar Petroleum Co. Ltd. (“Delmar”) and the vessel was renamed “FAVOUR”.[14]On 8-9 October 2012 Mr Doe of The Standard Club agreed a verbal 1 year time extension with Mr Chard of Gard and indicated a willingness to agree to an indefinite time extension.[15]On 9 October 2012 the Admiralty Claim Form in rem was issued.[16]On 18 September 2013 the Claimant’s solicitors, More Fisher Brown (“MFB”), provided a quantum schedule and supporting documents to The Standard Club. There followed a number of requests by MFB to The Standard Club regarding authority to accept service of the Claim Form and whether solicitors had been authorised to accept service. The Defendant’s solicitors, Holman Fenwick & Willan (“HFW”), responded on 30 September 2013 stating that they would be in contact once they have had an opportunity to consider the papers. On 1 October 2013 HFW advised MFB that they had recommended that their clients concede liability “at 100/0 in favour of your client. We expect instructions overnight”.[17]On 3 October 2013 the Claimant made Application 1 referring to the fact that the vessel had traded exclusively in West Africa since the issue of the Claim Form. On 7 October 2013 Eder J gave permission to amend the description of the Defendant on the Claim Form; to extend the time to serve the Claim Form by 8 months up to 9 June 2014 and to serve the Claim Form on Sener and Delmar out of the jurisdiction.[18]On 11 October 2013 HFW advised MFB that as the 12 month period for serving the Claim Form has expired, the claim was now time barred. On 15 October 2013 MFB served on HFW a copy of Application 1 and associated documents, including the Claim Form and a sealed copy of Eder J’s Order. HFW replied on 13 November 2013 expressing their view that the in rem claim was time barred and referring to MFB’s error of procedure in failing to issue an in rem and an in personam claim at the same time.[19]On 10 December 2013 Application 2 was issued with supporting evidence referring to the fact that the vessel and her sister ships have not been within the jurisdiction since the in rem Claim Form was issued and to the provisions of the Merchant Shipping Act 1995 (“the MSA”) justifying a mandatory extension of time for service (s.190(6)) and/or a discretionary extension of time for service under s.190(5) MSA, CPR 7.6 and/or CPR 3.10.[20]On 11 December 2013 the in personam Claim Form was issued.[21]On 13 December 2013 Application 3 was issued.[22]On 23 January 2014 Flaux J granted permission to amend the in rem Claim Form to add the following sister- ship defendants, the Owners and/or Bareboat Charterers of the vessels MV “MIRAGE-S”, MV “SELAY-S”, MV “SELIN-S” and MV “SUDE-S”. The undisputed evidence is that the “MIRAGE-S” is no longer owned by the Defendant.[23]On 4 March 2014 Application 4 was issued.[24]It is now common ground that the collision claim gave rise to a maritime lien against the vessel which survives any changes of ownership.[25]The Claimant accordingly says that the fact that the vessel was sold by the Defendant to new owners Delmar on 8 June 2012 and re-named “FAVOUR” does not prevent service of the in rem Claim Form upon(a) “FAVOUR” or(b) any sister ships of the vessel which remain in the ownership of the Defendant, as and when any of those vessels calls within the jurisdiction.[26]It is common ground that the Defendant continues to own 3 sister ships of “NIYAZI S”, namely “SELAY S”, “SUDE S” and “SELIN S”.[27]It is also common ground that the vessel and her sister ships, have at all material times remained out of the jurisdiction since the in rem Claim Form was issued on 9 October 2012 and there is no evidence that any of the vessels have at any time called within the jurisdiction since the date of the collision. Following the collision the vessel remained in UK territorial waters until 2259 on 14 October 2010.

The Issues

[28]The principal issues to be determined may be stated as follows:(1) Whether there should be (i) a mandatory extension of time or (ii) a discretionary extension of time for the bringing of the in rem proceedings.(2) Whether there needs to be and, if so, whether there should be (i) a mandatory extension or (ii) a discretionary extension of time for the bringing of the in personam proceedings.(3) Whether there needs to be and, if so, whether there should be (i) a mandatory extension or (ii) a discretionary extension of time for the joinder of the sister ships to in rem proceedings.

The relevant legal background

[29]The statutory provision which is in issue in these applications is s. 190 of the MSA. It provides as follows:
“Time limit for proceedings against owners or ship 190. (1) This section applies to any proceedings to enforce any claim or lien against a ship or her owners – (a) in respect of damage or loss caused by the fault of that ship to another ship, its cargo or freight or any property on board it; or (b) for damages for loss of life or personal injury caused by the fault of that ship to any person on board another ship. (2) The extent of the fault is immaterial for the purposes of this section. (3) Subject to subsections (5) and (6) below, no proceedings to which this section applies shall be brought after the period of two years from the date when- (a) the damage or loss was caused; or (b) the loss of life or injury was suffered (4) Subject to subsections (5) and (6) below, no proceedings under any of sections 187 to 189 to enforce any contribution in respect of any overpaid proportion of any damages for loss of life or personal injury shall be brought after the period of one year from the date of payment. (5) Any court having jurisdiction in such proceedings may, in accordance with rules of court, extend the period allowed for bringing proceedings to such extent and on such conditions as it thinks fit. (6) Any such court, if satisfied that there has not been during any period allowed for bringing proceedings any reasonable opportunity of arresting the defendant ship within- (a) the jurisdiction of the court, or (b) the territorial sea of the country to which the plaintiff’s ship belongs or in which the plaintiff resides or has his principal place of business, shall extend the period allowed for bringing proceedings to an extent sufficient to give a reasonable opportunity of so arresting the ship.” (1) This section applies to any proceedings to enforce any claim or lien against a ship or her owners – (a) in respect of damage or loss caused by the fault of that ship to another ship, its cargo or freight or any property on board it; or (b) for damages for loss of life or personal injury caused by the fault of that ship to any person on board another ship. (2) The extent of the fault is immaterial for the purposes of this section. (3) Subject to subsections (5) and (6) below, no proceedings to which this section applies shall be brought after the period of two years from the date when- (a) the damage or loss was caused; or (b) the loss of life or injury was suffered (4) Subject to subsections (5) and (6) below, no proceedings under any of sections 187 to 189 to enforce any contribution in respect of any overpaid proportion of any damages for loss of life or personal injury shall be brought after the period of one year from the date of payment. (5) Any court having jurisdiction in such proceedings may, in accordance with rules of court, extend the period allowed for bringing proceedings to such extent and on such conditions as it thinks fit. (6) Any such court, if satisfied that there has not been during any period allowed for bringing proceedings any reasonable opportunity of arresting the defendant ship within- (a) the jurisdiction of the court, or (b) the territorial sea of the country to which the plaintiff’s ship belongs or in which the plaintiff resides or has his principal place of business, shall extend the period allowed for bringing proceedings to an extent sufficient to give a reasonable opportunity of so arresting the ship.”
[30]A two year time limit for the bringing of proceedings is imposed by s.190(3). The two year period reflects the time limit internationally agreed since the Brussels Convention of 1910.[31]S.190 allows for that time limit to be extended. A mandatory extension may be granted where the requirements of s.190(6) are satisfied. A discretionary extension may also be granted under s.190(5).[32]Whether a mandatory extension is to be granted depends on whether there has been “any reasonable opportunity of arresting the defendant ship” during the two year period “allowed for bringing proceedings”.[33]It was common ground that the discretion under s. 190(5), MSA 1995 should be exercised by applying the two-stage test set out by the Court of Appeal in The Al Tabith [1995] 2 Lloyd’s Rep 336. As stated by Hirst LJ at p342:
“At stage one the Court must consider whether good reason for an extension has been demonstrated by the plaintiff, which is essentially a question of fact. If, and only if, the plaintiff succeeds at stage one in establishing good reason does the Court proceed to stage two, which is a discretionary exercise involving value judgments including, where appropriate the balance of hardship, which then enters the arena for the first and only time.”
[34]In considering what will be a good reason the Court of Appeal expressly approved the following italicised passage from the first instance judgment of Sheen J [1993] 2 Lloyd’s Rep 214 at p219:
“It seems to me that plaintiffs who seek to establish that there is good reason to extend the normal period of limitation must show that their failure was not merely due to their own mistake. It cannot be a good reason for extending the time limit that the defendants are unable to show that there would be any specific prejudice to them in conducting their defence. At the end of two and a half years, it would be virtually impossible to show such prejudice.”
[35]Hirst LJ commented on this passage as follows at p342:
“It follows that in my judgment Mr Justice Sheen’s ratio in the italicised passage quoted above was, despite Mr. Charlton’s criticisms, sound in law as a matter of general principle. Furthermore, the first sentence of this italicised passage, which lies at the very heart of the learned Judge’s reasoning and which states categorically that the plaintiffs must demonstrate that their failure was not merely due to their own mistake, is unimpeachable. Mere carelessness has never been a good reason for an extension (see note 6/8/4 in The Supreme Court Practice 1993).”
[36]In The “Pearl of Jebel Ali” [2009] 2 Lloyd’s Rep 484 Teare J observed at [37] that what is a good reason cannot be defined and must depend on all the circumstances of the case. On the facts of that case the reason was a misunderstanding by the Admiralty Manager of a firm of solicitors of the meaning (as it was held to be) of an agreement expressed in “unusual and clumsy terms”. Teare J held that this was not “culpable” even if it was a “mistake” and decided that good reason had been shown. (1) Whether there should be a mandatory extension of time for the bringing of the in rem proceedings.[37]In the evidence and the written submissions the focus of the debate on this issue was whether the order for an extension made by Eder J was properly made in circumstances where it was seemingly not sought under s.190(6). However, it was accepted that, whether or not that was so, I could make an order under s.190(6) and I gave the Claimant permission to amend their application notice to seek such an order.[38]At the hearing the Defendant sought permission to contend that no mandatory extension should be granted because the evidence was that the vessel remained in UK waters for four days after the collision so that there was “a reasonable opportunity” of arresting the vessel.[39]I allowed the Defendant to raise this new argument on the narrow basis raised and gave directions for further evidence/submissions. The Defendant then sought to widen its new case to cover the period from 2200 on 19 October 2010 to the early hours of 21 October 2010 when the vessel was at Terneuzen in the Netherlands, which was said to be within the territorial sea of the country to which the Claimant’s ship belongs or in which the Claimant resides or has its principal place of business. In support of its case it put forward a statement from a Dutch lawyer. The Claimant resisted the widening of the application in this way at such a late stage.[40]Having carefully considered the parties’ submissions I declined to permit the Defendant to raise this new case. The contention that there was a “reasonable opportunity” to arrest the vessel is one which could and should have been raised as part of the challenge made to the mandatory extensions of time granted by Eder J and Flaux J. In accordance with the Rules any evidence in support of such a case should have been provided well in advance of the hearing. I only allowed the Defendant to raise this new ground at the hearing on the limited basis upon which it was then advanced, in relation to which there was existing evidence. Had it been put on the wider basis now advanced I may well have refused the application altogether as being an inexcusably late application made in breach of the Rules. In all the circumstances I did not consider that it would be just, appropriate or in accordance with the overriding objective to allow the application to be extended to embrace an entirely new area of evidence which would require extensive further factual and expert evidence. In the exercise of my discretion I accordingly refused the Defendant permission to advance this new case.[41]In relation to the period when the vessel was in UK waters following the collision the movements of the vessel were as follows: 00:00 11 October: Vessel departs Manchester Ship Canal 22:59 12 October: Vessel arrives at E Wight anchorage near the Isle of Wight where she remains for 1 hour before shifting to Bembridge anchorage near the Isle of Wight at 23.59 23:59 12 October to 21.59 14 October: Vessel at Bembridge anchorage near the Isle of Wight 21:59 14 October: Vessel shifts to E Wight anchorage 22:59 14 October: Vessel sails for the Netherlands[42]It is the Defendant’s case that the Claimant had a reasonable opportunity to arrest the vessel whilst she was at St Helen’s Anchorage on 13-14 October 2010. In support of that case the Defendant submits that the Claimant could and should have instructed admiralty solicitors immediately following the collision. Such solicitors would have been able to track the movements of the vessel by reference to her AIS data. Had they done so they would have seen that there was an opportunity to arrest the vessel whilst she was at anchor off the Isle of Wight, within Portsmouth Port limits. The necessary paperwork for the issuance of a warrant of arrest should already have been prepared and the two days that the vessel remained at anchorage off the Isle of Wight would have been sufficient for the arrest to be made.[43]The Defendant’s case assumes that the Claimant would have instructed admiralty solicitors from the outset and that they would have been given immediate instructions to arrest the vessel. The Defendants submit that this is to be assumed for the purpose of the test in s.190(6) and that this is supported by the dictum of Hill J in The “Largo Law” (1920) 3 Ll. L. Rep 92:
“Whatever the motives of the plaintiffs were for not taking action earlier, the matter I have to determine is whether, within the meaning of Sect. 8, there was a reasonable opportunity of arresting the vessel within the jurisdiction of the Court.”
[44]I do not accept that s.190(6) requires any assumptions or presumptions to be made. The issue is one of fact. Was there a “reasonable opportunity” to arrest the vessel? That is a fact sensitive issue which will depend on all the circumstance of the case. Those circumstances may include those relating to the claimant. The test is objective, but it is not an abstract exercise. Indeed in The “Largo Law” Hill J expressly referred to the fact that the owners of the claimant vessel were in Canada and the managers in New York as being a relevant factor.[45]Whether or not that is so, the initial stages following a collision such as this are likely to be investigatory. The cause of the collision, relative blameworthiness and the fact and extent of any resulting damage and required repair need to be looked into. Whilst the vessel owner’s P&I Club is likely to be involved at an early stage it by no means follows that experienced admiralty solicitors will immediately be instructed, or, if they are, that they will be immediately instructed in relation to the issue of arrest.[46]In the present case there were particular and understandable reasons for Gard deciding not to seek to commence proceedings immediately, namely that the damage was provisionally considered to be modest and the Defendant was insured via one of the IG Group P&I Clubs.[47]Even if an immediate decision had been taken to instruct admiralty solicitors and to commence arrest proceedings it would have taken time to prepare any such application. The statement of the amount of security sought would have required some assessment of the damage suffered and estimated repair costs to be obtained. It would also have been necessary to verify that there were no caveats or cautions against arrest.[48]Once the necessary paperwork had been prepared, there remained a number of practical restrictions on any opportunity for arrest which there may have been. In particular: the AIS data shows that the vessel was shifting anchorage on a number of occasions; the AIS data showed her destination to be Eastham, which was then changed to Fawley, but she called at neither; the time the vessel spent off the Isle of Wight was limited and it was at anchorage.[49]The fact that the vessel is at anchorage is a relevant factor. The evidence of Ms Hunter-Davies of MFB was that the Admiralty Marshal confirmed to her that arrests of vessels at anchor are highly unusual. He said that they are usually denied on the basis of safety and referred her to the authority of The Berny [1977] 2 Lloyd’s Rep. 533. In that case Brandon J stated as follows:
“On these facts the question arises whether the presence of a ship at anchor within the territorial waters of England and Wales but not within the limits of a port, affords reasonable opportunity for effecting service on her and arresting her. In my view the answer to this question should, in general, be in the negative. This is not because, there is any magic in a ship being within the limits of a port, but because, if she is not, it likely that there will be practical difficulties, and there might well in certain circumstances be various dangers, in seeking to serve a writ on her and arrest her. The Court has to bear in mind that the duty of arresting a ship and often at the time of serving a writ on her, falls on the Admiralty Marshall or his deputies, and it should not adopt an approach to the matter which would or might expose these persons to unreasonable difficulties or dangers. There may be exceptions to the general view which I have expressed, depending on the circumstances of a particular case, but I should not regard the case under discussion, of a ship anchored for five days in Tees Bay, probably in order to shelter from bad weather, as constituting such an exception. This general view on the matter appears to be in accordance with the approach adopted by Mr. Justice Hill in the The Largo Law, (1920) 15 Asp.M.L.C. (N.S.) 104.”
[50]The Defendant points out that these observations related to a vessel which was at anchor outside the port and that there was no reason why arrest could not be effected at anchorage within port limits, provided there are no safety issues. However, in many cases there will be safety issues about which the Admiralty Marshal or his deputy would have to be satisfied, as explained in paragraph 12 of Ms Hunter-Davies’s 6th witness statement. In any event there is no reason to doubt that the reported evidence of the Admiralty Marshal that arrest at anchor is highly unusual for this reason. Indeed, despite HFW’s extensive Admiralty experience, they could only cite one example of such an arrest, back in 2004.[51]The Defendant also submits that where “it is not reasonably practicable to serve the warrant” notice of issue of the warrant may be given “to those in charge of the property” pursuant to PD61.5.5(b). However, this could not be done until it had been established that service of the warrant was not “reasonably practicable” and that is unlikely to have been established within the short window of opportunity afforded.[52]In the light of the various factors identified above, and those set out in paragraph 5 of Ms Hunter-Davies 6th witness statement, in the circumstances of this case I conclude and find that there was no reasonable opportunity to arrest the vessel during the limited window which existed immediately following the collision. It follows that the Claimant is entitled to a mandatory extension of time for service of the in rem Claim Form.[53]Even if that be wrong, I would grant a discretionary extension. In my judgment there was good reason for the Claimant not to arrest the vessel immediately following the collision. It needed time to investigate the matter, consider the position, instruct solicitors and decide what steps should be taken. Further, there is no evidence to suggest that it should have been apparent to the Claimant at the outset that neither the vessel nor any sister ship was likely to call within the jurisdiction during the two year limitation period. Thereafter there was no opportunity to arrest the vessel.[54]The order granting permission for the in rem Claim Form to be served out of the jurisdiction should, however, be set aside. The Claimant seeks to rely on the power of the Court to order service of an in rem Claim Form by alternative means under PD 61 para. 3.6(7). However, this may only be ordered where the “property against which the claim is brought or part of it is within the jurisdiction of the court”, which it was not. (2) Whether there needs to be and, if so, whether there should be(i) a mandatory extension or(ii) a discretionary extension of time for the bringing of the in personam proceedings.

The need for an extension

[55]The Claimant argues that in circumstances where the underlying cause of action had been brought in time in the in rem proceedings there is no time limit applicable under s.190(3) to in personam proceedings raising the same cause of action. In support of its case the Claimant relied by analogy on The Nordglimt [1987] 1 QB 183 in which Hobhouse J held that suit had been brought for the purpose of the one year time bar in Article III r.6 of the Hague Visby Rules by in personam proceedings brought within one year in Belgium so that in rem proceedings brought in this country after the one year period had expired were not time barred. The Claimant also placed reliance on the analysis of in rem actions in The Deichland [1990] 1 QB 361 and The Indian Grace (No 2) [1998] AC 878 in which it was stated that the “reality” is that an in rem action is an action against the vessel owner.[56]Whether or not an in rem action is an action against the owner, and whether or not bringing in personam proceedings amounts to the bringing of suit under Article III r.6 for the purpose of subsequent in rem proceedings, the issue in the present case turns on the proper interpretation of s.190(3). The two year limit set out in s.190(3) applies to the proceedings which are being brought. The relevant proceedings being brought are those commenced by the in personam proceedings initiated on the issue of Claim Form 2013 Folio 1622 on 11 December 2013. Those are not the same proceedings as the in rem proceedings initiated on the issue of Claim Form 2012 Folio 1328. The two proceedings were brought at a different time, under separate claim forms and using a different form of Claim Form.[57]The need to issue separate Claim Forms for in rem and in personam proceedings is made clear by the Practice Direction reported at [1979] 1 WLR 426 which is set out at para. 2D-143 of Volume 2 of White Book 2014. It provides:
“If it is desired to commence proceedings both in rem and in personam separate claim forms must be issued.”
[58]The distinction between in rem and in personam proceedings is reflected in s.190 itself. Thus its heading is “Time limit for proceedings against owners or ship” (emphasis added).[59]In my judgment it is clear that where, as Admiralty Court practice requires, separate in rem and in personam proceedings are commenced then the s.190(3) applies to each set of proceedings. It follows that the two year limit does apply to the in personam proceedings and that an extension of time is required.

Mandatory extension

[60]The Defendant submits that s190(6) is clearly addressed at in rem proceedings and has no application to in personam proceedings.[61]As the Defendant points out, this sub-section obliges the Court upon the fulfilment of the cited conditions to “extend the period allowed for bringing proceedings to an extent sufficient to give a reasonable opportunity of so arresting the ship.” In referring to “arresting the ship” the sub-section is surely concerned only with the extension of time for in rem proceedings. By contrast, the ship cannot be arrested by way of an in personam claim form.[62]The Claimant submits that, as the title to s.190 makes clear, the section is concerned with both in rem and in personam claims and throughout the section any reference to “proceedings” is referring to both.[63]It is correct that section 190 is concerned with the “Time limit” for both in rem and in personam proceedings. However, that does not in itself mean that “proceedings” in s.190 must always be referring to both in rem and in personam proceedings, regardless of content and context. The section must be interpreted intelligently rather than mechanically.[64]I agree with the Defendant that s.190(6) is clearly concerned only with in rem proceedings. The rationale of the extension granted thereunder is the lack of a reasonable opportunity to arrest the defendant ship. That has no application to an in personam claim. One brings an in personam claim by serving the claim form on the person, not the res. One cannot arrest by way of an in personam claim.[65]The fact that there may have been no reasonable opportunity to arrest the ship is not relevant to and does not justify a failure to serve in personam proceedings. As such, it cannot justify an extension of time for so doing, still less a mandatory extension.[66]On the Claimant’s case it would be entitled to a mandatory extension of time for service of its in personam claim form regardless of the ease of service and for reasons unrelated thereto. This cannot sensibly have been the purpose of s.190(6).[67]In my judgment s.190(6) is referring to and only applies to in rem proceedings. It follows that the Claimant is not entitled to a mandatory extension of time in respect of the in personam proceedings.

Discretionary extension

[68]The first stage of the test requires one to focus on the reason why the in personam proceedings were not issued within the two year time limit.[69]MFB was aware of the two year limit and the need to issue proceedings within time, as it did so by issuing the in rem Claim Form. The reason that it did not issue an in personam Claim Form is that the case handler, Ms Hunter-Davies, believed that the Claim Form as issued was a hybrid Claim Form which included an in personam claim since the Defendant was named in the Claim Form.[70]She explained that it is the practice of the Admiralty and Commercial Court Registry to insist on the inclusion of an address for both claimant and the defendant and that they refuse to issue the Claim Form without this information being included. The evidence was that the reason for this is that it allows them to trace the parties should the matter become dormant and they receive no satisfactory responses from the solicitors on the record. Ms Hunter-Davies therefore included both the name and address of the Defendant on the in rem Claim Form so that it stated:
“Claim Form (Admiralty claim in rem) Admiralty claim in rem against “NIYAZI S” of the Port of ISTANBUL Claimant The Owners and/or Bareboat Charterers of the Vessel “STOLT KESTREL”
Stolt Kestrel B.V. Westerlan 5 3016CK Rotterdam The Netherlands Defendant The Owners and/or Bareboat Charterers of the Vessel “NIYAZI S” SENER PETROL DENIZCILIK TICARET AS MURSEL PASA CADDESI 243 BALTKARABAS MAH FATIH 34087 ISTANBUL, TURKEY Brief details of claim ….” Admiralty claim in rem against of the Port of ISTANBUL Claimant The Owners and/or Bareboat Charterers of the Vessel “STOLT KESTREL” Westerlan 5 The Netherlands Defendant The Owners and/or Bareboat Charterers of the Vessel “NIYAZI S” SENER PETROL DENIZCILIK TICARET AS MURSEL PASA CADDESI 243 BALTKARABAS MAH FATIH

Brief details of claim

[71]Ms Hunter-Davies explained that she was not aware of the 1979 Practice Direction and that it is not included in the on-line version of the White Book.[72]Admiralty claims are governed by PD61.[73]PD61.3 is headed “Claims in rem”. It states that a “claim form in rem must be in Form ADM1” and the acknowledgment of service in Form ADM2. It states that the defendant must be “described” in the Claim Form.[74]Claims in personam (now called “Other claims”) are dealt with in PD61.12. It states that the claim form must be in Form ADM1A. It states that the defendant must be named in the claim form. All such claims proceed in accordance with Part 58 (Commercial Court).[75]The distinction between in rem and in personam proceedings is therefore clearly set out in PD61. They are subject to different requirements and they require different claim forms to be issued.[76]The Claim Form issued in this case was in Form ADM1 and it was headed “Admiralty claim in rem”. In my judgment it should have been clear to Ms Hunter-Davies that the Claim Form she was issuing was an in rem Claim Form and that including the name of the Defendant owner did not change that. There is no such thing as a hybrid or combined in rem/in personam Claim Form. Separate Claim Forms are required for both in rem and in personam proceedings as PD61 makes clear. This should have been known by Mr Hunter-Davies regardless of whether she was aware of the 1979 Practice Direction, although I consider that she should have been aware of any relevant Practice Direction. What the Registry may have said does not change matters. The relevant requirements are as set out in PD61 and the 1979 Practice Direction. In any event it would appear that all the Registry required was the inclusion of an address, not the Defendant owner’s name. Whilst I am prepared to accept that Ms Hunter-Davies’s mistake was explicable, for all these reasons I am unable to accept that it was excusable and I find the mistake to be culpable.[77]The Claimant also sought to rely on a number of other matters in support of its case on good reason, namely:(a) It contends that there is no defence to the claim;(b) The Defendant, through its P&I Club and HFW, encouraged MFB and their clients to believe that quantum would be dealt with consensually;(c) Standard stated that they were willing to agree an indefinite extension of time for the bringing of the claim;(d) The underlying claim is not time barred as time was protected by the issue on the in rem Claim Form on 9 October 2012 and is still valid for service pursuant to the Orders of Eder J and/or Flaux J;(e) The in personam Claim Form was issued within one month of HFW having alerted MFB to their view that MFB had committed an error of procedure in not issuing a separate in personam Claim Form;(f) If, as the Claimant contends appears likely, the vessel and her sister ships seek to evade service by not calling within the jurisdiction, the in personam Claim Form is the only means whereby the underlying claim can be served on the Defendant;(g) Significant prejudice will be caused to the Claimant if its claim for USD400,000 plus ongoing interest and costs cannot be pursued;(h) MFB’s error is no more culpable than HFW’s error in failing to appreciate until it was pointed out to them by MFB that the claim attracts a maritime lien;(i) The overriding objective of dealing with cases justly strongly favours an extension of time for the issue and service of the in personam Claim Form on the Defendant out of the jurisdiction.[78]In my judgment, most of these matters are relevant to the second stage of discretion rather than the first stage of whether there was good reason for not issuing the in personam Claim Form in time.[79]Even if points (b) and (c) were made out (and they were disputed), they were not the reason why the in personam Claim Form was not issued in time. This is not one of those cases where a party was lulled into a false sense of security because of discussions with the other party. MFB appreciated, notwithstanding those discussions, that a Claim Form needed to be issued, and did so. The error was in failing to issue an in personam Claim Form as well, rather than failing to issue a Claim Form at all. Point (d) is similarly not relevant to the reason for that failure.[80]Point (e) is correct, but MFB had had nearly a year to consider and seek to regularise the position before the point was raised by HFW. In fact nothing seems to have happened between the issue of the in rem Claim Form on 9 October 2012 and the provision by MFB of quantum documentation on 18 September 2013.[81]As to point (h), the fact HFW may also have been mistaken about a different matter does not help to explain or excuse the error which MFB made.[82]The other points made are only relevant to the balance of hardship and the exercise of discretion.[83]For all these reasons I am not satisfied that good reason has been shown for the failure to issue the in personam Claim Form within the known two year limit or until 14 months later. Had good reason been shown it is likely that I would have exercised my discretion to extend time, largely for the reasons given by the Claimant and in particular:(i) although the claim has not been admitted, it is clearly a strong claim (as has been acknowledged) in relation to which the only issue is likely to be quantum;(ii) the Defendant, its Club and solicitors were engaged with the claim within the two year limit;(iii) the Club indicated a willingness for time to be extended, and(iv) unless an extension is granted, there is a real risk that the Claimant will not be able to pursue its claim. (3) Whether there needs to be and, if so, whether there should be (i) a mandatory extension or (ii) a discretionary extension of time for the joinder of the sister ships to in rem proceedings.[84]As to the need for an extension of time, the Claimant submits that the addition of the sister ships as defendants to the in rem proceedings is not caught by the s.190(3) time limit. The underlying in rem proceedings were commenced in time and the claim remains one which is in “reality” against the owners, who are also the owners of the sister ships.[85]As already noted, s.190 draws a distinction between proceedings against the “owners or ship”. Proceedings against a ship are not the same as proceedings against the owners. Equally proceedings against the wrongdoing ship are not the same as sister ship proceedings. The logic of the Claimant’s argument is that there would be no applicable time limit for sister ship proceedings, which cannot have been the intention, as Mocatta J held in The Preveze [1973] 1 Lloyd’s Rep 202.[86]That case concerned the precursor to s.190(3) (s.8 of the Maritime Conventions Act 1911) but the language of the section was materially the same. When considering the applicability of the section to sister ship proceedings Mocatta J states as follows:
“When the amendment of the writ by adding amongst others the name of the Utrecht was made on Apr.7, 1971, nearly three years had elapsed since the date of the collision. Both Counsel in their argument assumed, and when questioned by me about the matters submitted, that sect. 8 of the Act of 1911 applied to proceedings under sect. 3 (4) of the Act of 1956 against the sister ship. Commonsense would certainly seem to require this result since otherwise an action could be begun in rem against a sister ship without regard to the two year or perhaps any other period of limitation; certainly the Limitation Act, 1939, would not apply : see sect. 2 (6) thereof. It is distinctly unfortunate that there is no provision for this in the 1956 Act, expressly making sect. 8 of the 1911 Act applicable to sister ship proceedings; if one seeks to apply sect. 8 to such proceedings, one is faced with very considerable difficulties of language. It cannot however in my judgment have been the intention of Parliament in 1956 when enlarging the circumstances in which an action in rem might be employed by making it available against a sister ship, to have rendered the limitation provisions of sect. 8 of the 1911 Act inapplicable to such enlargement. Despite the difficulties of language involved, I therefore proceed on the basis as submitted by both Counsel that sect.8 of the 1911 Act is to be applied to proceedings against a sister ship.”
[87]It follows that, as the court held in The Preveze, an extension of time is required for the bringing of proceedings against the sister ships and to any amendment to add them to existing proceedings.

Mandatory extension of time

[88]In The Preveze the court proceeded on the basis that the only extension of time which could be obtained was a discretionary extension of time. At p205 rhs it was noted as follows:
“It was accepted by Mr Stone for the plaintiffs that whether or not the Court would have allowed the writ to be amended by the addition of the Utrecht and the eight other sister ships would have depended upon whether the Court thought fit to do so under the wide discretion conferred on it by the first limb of the proviso under sect. 8.”
[89]The reason why there could be no mandatory extension of time is not addressed or explained in the judgment. The Defendant submits that this reflects the fact that experienced counsel recognised that the relevant section only applies to the wrongdoing ship. This is how the matter is put in Marsden on Collisions at Sea (13th Edition) at paragraph 11-31, referring to The Preveze:
“This mandatory extension, however, only applies to the delinquent vessel itself; it does not provide a right to an extension of time for the purposes of proceeding under the “sister-ship” jurisdiction of s.21 (4) of the Supreme Court Act 1981.”
[90]It is to be noted, however, that in The Preveze the sister ship tug “Utrecht” had called within the jurisdiction on a number of occasions (p204 lhc). That being so, it may be that it was recognised that there could be no mandatory extension for sister ship proceedings on the facts rather than as a matter of law.[91]The issue turns on the proper interpretation of s.190(6). The Defendant submits that the “defendant ship” means and can only mean the wrongdoing ship. However, in a case in which sister ship proceedings were commenced from the outset it would be surprising if a mandatory extension of time could be obtained because there had been no reasonable opportunity to arrest the wrongdoing ship, even though there had been numerous opportunities to arrest sister ships. In this connection it is to be noted that Meesonand Kimble on Admiralty Jurisdiction and Practice (4th ed.) states at para. 5.35 that:
“The court is obliged to extend time if there has not been a “reasonable opportunity” to arrest the ship or sister ship..”
(emphasis added)[92]In relation to sister ship proceedings the relevant opportunity is to arrest either the wrongdoing ship or the sister ship. If so then the “defendant ship” must cover both. In any event a sister ship can be regarded as being a “defendant” ship. It is a ship against which claims under s.190 may be brought.[93]The Defendant also points out that s. 190(1)(a) applies “in respect of damage or loss caused by the fault of that ship to another ship …”. A sister ship would not cause any damage but the ship mentioned in s. 190(6) must be intended to be the same ship as in s. 190(1)(a). However, taken to its logical conclusion this argument would mean that s.190 is only concerned with proceedings as described in s.190(1) – i.e. in rem proceedings against the ship causing the damage or in personam proceedings. But it is accepted and asserted by the Defendant (correctly) that the two year limitation applies to sister ship proceedings, as does the discretionary extension of time. If so, there is no difficulty in interpreting other sub-sections as also applying also to sister ship proceedings, including s.190(6). As a matter of language a sister ship may be regarded as a defendant ship in any proceedings brought against her.[94]In my judgment s.190(6) is therefore capable of applying to sister ships. If it is wished to bring sister ship proceedings in circumstances in which there has been no reasonable opportunity to arrest either the wrongdoing ship or any sister ship then a mandatory extension would be both appropriate and, indeed, required. That is this case. In those circumstances the joinder of the sister ships to the action was appropriate and should not be set aside.

Discretionary extension of time

[95]In the light of my conclusion on mandatory extension of time it is not necessary to decide this issue. However, it is to be observed that since the Claimant relied on essentially the same grounds as in relation to the in personam Claim Form it would be likely to face difficulties in establishing good reason.

Conclusion

[96]For the reasons outlined above my conclusions are as follows:(1) There should be a mandatory extension of time, alternatively a discretionary extension of time, for the bringing of the in rem proceedings.(2) There needs to be an extension of time for the bringing of the in personam proceedings but a mandatory extension cannot be granted and a discretionary extension should not be granted.(3) There needs to be an extension of time for the joinder of the sister ships to the proceedings and a mandatory extension is to be granted.

Cited in 1 later judgment