Marina Developments Limited v Owner(s) of SY Explorer [2024] EWHC 3531 (Admlty)

[2024] EWHC 3531 (Admlty)

Case No AD-2024-000026

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

ADMIRALTY COURT (KBD)

Venue The Rolls Building, 7 Rolls Buildings, Fetter Lane

London

EC4A 1NL

Dates of hearing: 8 November & 20 December 2024

Before

ADMIRALTY REGISTRAR DAVISON

Between

MARINA DEVELOPMENTS LIMITEDClaimant

OWNER(S) OF SY EXPLORERDefendant

Mr Joseph England (instructed by Bargate Murray) appeared for Claimant.

Mr David Barnard (instructed by HFW) appeared for Defendant.

Approved Judgment

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Date 2024-12-20

ADMIRALTY REGISTRAR DAVISON:

[1]What follows are the corrected versions of two ex tempore judgments given in November and December 2024. I am promulgating them with a neutral citation number because the second judgment addresses a point which, though neither complicated nor, in the context of this claim, valuable, is nevertheless a point going to the type and character of debt that can found and justify the arrest of a vessel. It may therefore have some bearing on other cases.

[2]There are two applications before the court, although the first of them, for the reasons just discussed between me and counsel, subdivides into two parts and only the first part can be dealt with today.

[3]The first application by the defendant is dated 12 June of this year. In it, the defendant seeks an order “to have the claimant’s alleged in rem claim dismissed because the court’s admiralty jurisdiction to hear the claimant’s alleged claim is not engaged”. The second application by the defendant was issued last Friday, on 1 November. It seeks an order that the claimant’s claim be struck out under CPR rule 3.4(2)(a) and/or under the court’s inherent jurisdiction because there are no reasonable grounds for bringing a claim against the defendant and, secondly and consequentially, that the “SY EXPLORER”, the defendant’s vessel, be released from arrest.

[4]The nub of both applications is a challenge to the proposition that the defendant, Mr McIntyre, was – or reasonably arguably was – the counterparty to a contract with the claimant, who I will refer to as “MDL”, for berthing at the claimant’s Southampton marina and for the payment of berthing fees.

[5]In the case of the first application, the principal issue is whether Mr McIntyre falls within the jurisdiction established by section 21(4) of the Senior Courts Act 1981, i.e. is the person who would be liable on the claim in an action in personam. The words “would be liable” indicate that the meaning is “would be liable on the assumption that the action succeeds”; (see The “St Elefterio”

[1957] P 179

[6]In the second application, the question can be phrased as whether the Particulars of Claim disclose reasonable grounds for bringing the claim. The defendant says that they do not because, on the contractual issue, the case is unwinnable.

[7]The berthing fees are alleged to have been incurred when the sailing vessels taking part in the 2023 Ocean Globe Race berthed at the marina at the commencement of the race. There were 14 vessels, including the defendant’s vessel SY EXPLORER. The defendant was the founder and chairman of the race. The vessels arrived on dates between 22 and 28 August 2023 and departed on 10 September 2023. On departure, MDL refused to provide clearance forms because the berthing fees, amounting to some £25,830, had not been paid. That marked the beginning of a disputatious correspondence, in the end leading to the arrest of the defendant’s vessel in May 2024.

[8]The defendant took the stance that either no fees were payable because MDL had agreed to provide berthing free of charge as part of an overall sponsorship deal or, if fees were payable, the counterparty was not the defendant, but rather an Australian company of which he was the chief executive officer. This company was Ocean Frontiers Pty Limited.

[9]I have concluded that the twin applications, so far as they are based upon these two points, are ambitious to the point of being misconceived, and I will explain my reasoning with proportionate economy and with minimal recitation of the underlying facts.

[10]I regard the proposition that the berthing was to be free as scarcely arguable and, to be fair, it was given little or no attention by Mr Barnard in his written and oral submissions. It is flatly contradicted by the defendant’s own statement in his email of 11 May 2023, in which he said “We are no longer offered free berthing fees” and flatly inconsistent with his having asked for a quote for “the costs of 14 OGR entrants marina berthing between arrival morning 26 August through to departure morning 10 September”. In response to that email, a rough quote was indeed given on 25 May.

[11]The more serious point taken by the defendant concerned the capacity in which he contracted, whether that contract was express or by conduct. I was referred to a number of authorities on this issue, of which the principal one was the Americas Bulk case

[2020] EWHC 147 (Comm)

. There is no need for me to quote from that authority, but I have had regard to the approach set out by HHJ Mark Pelling KC at paragraph 19.

[12]Condensed to its essentials, the defendant says that, when he countersigned the letter of intent dated 3 April 2023 and also in his signoff of all his emails, he used the wording “Don - OGR” or “Don - OGR Founder” or variations on that theme. In the letter of intent itself, he signed “Founder, for and on behalf of Ocean Globe Race 2023”. Ocean Globe Race was not a legal entity. It was a sporting event. Therefore, without more, the defendant would clearly have been contracting personally and his signoff and the words he used on the letter of intent would have been no more than a descriptor of the purpose and aims for which he was corresponding and contracting or intending to contract.

[13]The defendant has argued that the words are to be interpreted and indeed can only reasonably be interpreted as meaning he was acting as agent for Ocean Frontiers Pty Limited. This is because, in various places, including a briefing document inviting sponsorship and on the OGR website, Ocean Frontiers is described as the race organiser.

[14]No document has been produced demonstrating that Ocean Frontiers had authority to contract with this claimant or any other person connected with the race. No actual contract with any other party has been produced. And the wording used on the partnership opportunities document describes Ocean Frontiers as “race organiser, event underwriter and guarantor”. The expression “organiser” does not necessarily indicate that Ocean Frontiers was the principal behind the race. And the words “underwriter” and “guarantor” would tend to indicate that they stood behind the principal, rather than were the principal. The defendant never describes himself in any email as acting on their behalf and, to the extent that he says he did so orally, which is not entirely clear to me, the conversation is disputed.

[15]It is a stretch, to say the least, to argue that any reasonable person would have regarded the sign-off “Don, OGR” as meaning or only capable of meaning (by a process of extension) “Don, for an on behalf of Ocean Frontiers” and it is, in my judgment, quite impossible to say that the claimant’s case on this point – i.e. that he was contracting personally – is unwinnable. On the contrary, it is obviously reasonably arguable. I would go further and say that it is strongly arguable and certainly stronger than the defendant’s argument (if a comparison is relevant).

[16]So, for those reasons, I will find in favour of the claimant on what I will call part one of the defendant’s application of 12 June, and similarly I will find in favour of the claimant on the defendant’s second application.

[17]That leaves the defendant’s subsidiary point, which has assumed more importance. That point is that the claimant’s claim concerns the defendant’s vessel and 13 others. In respect of those other 13, Mr Barnard submitted that the claim did not arise “in connection with” the SY EXPLORER – that is to say the vessel that was arrested – and, therefore, was a permissible admiralty claim only to the extent that it concerned berthing fees exclusively attributable to the SY EXPLORER. It followed that the security required to release the SY EXPLORER was some £2,000, rather than the £25,830 which formed the amount of the claim.

[18]In between the conclusion of the submissions and the time I had appointed today when I was to give judgment, which was a period of a couple of hours, counsel emailed me on two points. One point was whether it was open to me, if I were in favour of the defendant on this, as Mr Barnard described it, “pure” admiralty jurisdiction point, I could nevertheless order the defendant to bring money into court. The other point was a new point, namely that Mr Barnard’s researches in that short interval had come up with a Singaporean case, The Alexandrea [2002] SGHC 82, which plainly has a bearing on the argument that he was putting before me.

[19]Because I only had a matter of minutes to read the case and because Mr England for the claimant had had even less time than that, it certainly did not seem appropriate to give judgment on that part of the defendant’s application. So what I have indicated I will do is give some directions for further submissions and I will give judgment on that part of the application at a later date. ------------------- 20th December 2024:

[1]This short judgment is to be read with the judgment that I gave on 8 November 2024. It addresses the second part of the defendant’s application dated 12 June 2024, namely, whether the court has in rem jurisdiction in respect of berthing and related fees incurred by vessels other than the SY EXPLORER but for which the defendant is, on the claimant’s case, contractually liable. Admiralty jurisdiction

[2]The claim is within the Admiralty jurisdiction of the court because it falls within section 20(2)(n) of the Senior Courts Act 1981.

(a) says:

“The Admiralty jurisdiction of the High Court shall be as follows, that is to say (a) jurisdiction to hear and determine any of the questions and claims mentioned in subsection (2).”

Subsection (2), in relevant part, says: “The questions and claims referred to in subsection (1)(a) are - (n) any claim in respect of the construction, repair or equipment of a ship or in respect of dock charges or dues”.

[3]Section 21 of the Act deals with “Mode of exercise of Admiralty jurisdiction”. Section 21(3) provides that an action in rem may be brought in the High Court in any case where there is a maritime lien on a ship. A claim in respect of dock charges or dues does not give rise to a maritime lien and so does not fall within section 21(3). (Another way of putting this would be to say that it is not a true in rem claim against the ship (see Admiralty Jurisdiction and Practice 5th Ed at 1.46)). But the claim may still be brought in rem if the provisions of section 21(3) and (4) are satisfied. These say:

“(3) In any case in which there is a maritime lien or other charge on any ship, aircraft or other property for the amount claimed, an action in rem may be brought in the High Court against that ship, aircraft or property. (4) In the case of any such claim as is mentioned in section 20(2)(e) to (r), where– (a) the claim arises in connection with a ship, and (b) the person who would be liable on the claim in an action in personam (‘the relevant person’) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against– (i) that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or (ii) any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.”

The submissions of the parties

[4]Mr Barnard’s submission on behalf of the defendant is that the claim in section 21(4) has to be connected with a particular ship, in this case the SY EXPLORER, and had to be confined to the services provided to that ship. That submission was principally based upon two passages from the speech of Lord Diplock in The Eschersheim

[1976] 2 Lloyds Rep 1

, page 1: “It is clear that to be liable to arrest a ship must not only be the property of the defendant to the action but must also be identifiable as the ship in connection with which the claim made in the action arose (or a sister ship of that ship). The nature of the ‘connection’ between the ship and the claim must have been intended to be the same as is expressed in the corresponding phrase in the Convention [the Arrest Convention] ‘the particular ship in respect of which the maritime claim arose’. One must therefore look at the description of each of the maritime claims included in the list in order to identify the particular ship in respect of which a claim of that description could arise”.

[5]Later on in his speech he said this:

“The cargo-owners’ claim clearly falls within the description in paragraph (g) [any claim for loss of or damage to goods carried in a ship] which reproduces in terms that are practically identical paragraph (f) in Article 1(1) of the Convention: but as I have already pointed out, the right of arrest conferred by section 3(4) is confined to the ship in connection with which the claim arose, (or a sister ship). The claims to which the right of arrest is confined are those mentioned in paragraphs (d) to (r) of section 1(1) [i.e. what is presently section 20(2) of the 1981 Act] With three exceptions, each of those paragraphs contains an express reference to ‘a ship’. The ship referred to in each of these paragraphs is the ship in connection with which a claim under that paragraph arises. The three exceptions relate to claims in respect of salvage, general average and bottomry where there can be no doubt as to the ship in connection with which claims of that nature arise. Paragraph (g) therefore permits the arrest of the ship in which the goods which have been lost or damaged were carried, in an action in rem by cargo owners against the owners of the carrying vessel. It does not authorise the arrest of any other ship: authority for that must be found under some other paragraph. So the arrest of the Rotesand as security for the cargo owner’s claim was not authorised under paragraph (g) of section 1(1).”

[6]The Rotesand was the tug which went to assist or salve the carrying vessel. In this passage Lord Diplock was saying that cargo owners could not, under the jurisdiction conferred by section 20(2)(g), arrest the tug which was not the carrying vessel but the allegedly negligent salving vessel.

[7]There is no authority specifically dealing with section 20(2)(n), but Mr Barnard submitted, first, that a proper reading of paragraph (n) was to add the words “of a ship” so that it would read in full as follows:

“Any claim in respect of the construction, repair or equipment of a ship or … of dock charges or dues of a ship”

. Second, he submitted that the ship so referred to was the ship in connection with which a claim under paragraph (n) arises, that is to say the SY EXPLORER and only the SY EXPLORER.

[8]He relied on two further cases. The first was The Lloyd Pacifico

[1995] 1 Lloyds Rep 54

. That case decided that paragraph (h) of section 20(3) [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] could not support the arrest of the Lloyd Pacifico where the contract between the claimant and the defendants did not require the defendants to use any particular ship. I quote from the judgment at page 60 column two:

“The contract does not require the defendants to use their own vessels or even vessels chartered by them. It expressly provides by clause 1 that they could use vessels engaged under a conference agreement or in a joint service. In either such case such a vessel might well not be owned or chartered by, or in the possession or control of the defendants. This contract contemplated the use or operation of vessels which would be identified in due course. It is not, in my judgment, seriously arguable that the contract was from the outset a contract relating to the use or hire of, or to the carriage of goods in all the ships owned by the defendants, or all the ships owned by the defendants which it was contemplated or anticipated might be used in the liner service. It follows that insofar as the plaintiffs assert a claim based upon an alleged repudiatory breach of the agreement, it does not arise out of a contract relating to the use or hire of, or to the carriage of goods in any particular ship, including Lloyd Pacifico.”

[9]The second case was the Singaporean case of The Alexandrea

[2002] 3 SLR 56

, [2002] SGHC 82. That case decided that sub-paragraph (m) [any claim in respect of goods or materials supplied to a ship for her operation or maintenance] could not support an action in rem against a bunker tanker brought not by the ship to which defective materials (in this case contaminated bunkers) were supplied, but by the corporation which, several contracts up the chain, was the original source of the fuel oil and which was itself facing contractual claims. Having reviewed the authorities, including The Eschersheim and The Lloyd Pacifico the Judicial Commissioner, Belinda Ang Saw Ean, at paragraphs 52 and 53 of her judgment said:

“Subsection (4) provides that an action in rem can be invoked only if the claim is ‘a claim arising in connection with a ship’. It is referring, in my view, to a ship in respect of which a maritime claim, as specified in section 3(1)(d) to (q) arises. This is undoubtedly so as section 3(1)(d) to (q) of the Act operates together with section 4(4) to the extent that it gives effect to that arrest provision. It is clear that ‘a ship’ in the phrase ‘being a claim arising in connection with a ship’ in subsection (4), is the same ship to which goods or materials were supplied in section 3(1)(l). The term ‘a ship’ as used in section 3(1)(l) is given the like meaning as that term when used within section 4(4)(a), namely, ‘a ship’, ‘the ship’, ‘that ship’.”

[10]Mr England for the claimant submitted that the authorities relied upon by the defendant were all concerned with arrests of the wrong vessel, whereas the issue here concerns the narrower question of the permissible scope of the claim against what was acknowledged to be the correct vessel. As to that, he submitted that there was no need or warrant to add the words “of a ship” to paragraph (n) of section 20(2) of the 1981 Act and that when that paragraph was read as written, the claim was(i) one of those mentioned in section 20(2) (e) to (r), and

(ii) arose in connection with a ship. It therefore satisfied the requirements of section 21(4).

[11]He further submitted that even if the words “of a ship” were added, the dock dues were claims properly brought in rem against the SY EXPLORER because the SY EXPLORER was the lead ship whose owner had agreed to pay the dues of the entire flotilla of 14 vessels.

[12]As to the reasoning in the authorities, particularly The Eschersheim and The Alexandrea, he submitted that it was all obiter and in the case of The Alexandrea “pretty slim”. Discussion and conclusions

[13]I do not at all agree that the reasoning in The Alexandrea is “slim”. On the contrary, the court carried out a full review of the relevant authorities and arrived at a conclusion which seems to me to be fully aligned with those authorities. Although it is a Singaporean case, and therefore not binding, it is entitled to considerable respect – the more so given that the judge is and has since November 2022 been a Justice of the Court of Appeal of Singapore.

[14]I agree with Mr Barnard that the sense of subsection (n) is indeed that the dock charges or dues are “of a ship”; indeed no other interpretation is realistically available. In the context of this case the dock dues of the SY EXPLORER were £2,171.36. The remainder of the sums claimed were the dock dues of the other ships of the flotilla. Mr McIntyre was, on the claimant’s case, personally liable for those dues, but that did not render them the dock dues of the SY EXPLORER. That would be to interpret the words “the claim arises in connection with a ship” in section 21(4) of the 1981 Act very widely, whereas the authorities in Lord Diplock’s speech in The Eschersheim mandate a narrow interpretation focused on the precise category of maritime claim “in order to identify the particular ship in respect of which a claim of that description applies”. If I were to adopt the wide interpretation urged on me by Mr England I would be departing from the whole trend of the authorities I have cited and expanding the scope of the Admiralty Court’s in rem jurisdiction in a way that has no proper statutory basis. It is true that this means that the claimant would have to bring different in rem claims against each of the vessels concerned, or content itself with a claim against this defendant, the bulk of which must be an in personam claim. But that is simply the result of a proper application of the jurisdictional rules set out in sections 20 and 21 of the 1981 Act. That the result is, from the claimant’s standpoint, awkward and unattractive is no basis to bend or overlook those rules.

[15]With some reluctance, which stems from the lack of merit, as I see it, on the defendant’s side, I would resolve this part of the defendant’s jurisdictional challenge in his favour. ----------------- (This Judgment has been approved by the Judge.) Digital Transcription by Marten Walsh Cherer Ltd., 2nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP. Telephone No: 020 7067 2900. DX 410 LDE Email: info@martenwalshcherer.com Web: www.martenwalshcherer.com