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[1989] ZASCA 30
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Transol Bunker BV v Motor Vessel "Andrico Unity" and Others; Grecian-Mar SRL v Motor Vessel "Andrico Unity" and Others (30/89) [1989] ZASCA 30; [1989] 2 All SA 303 (A) (29 March 1989)
IN THE SUPREME COURT OF SOUTH
AFRICA
(
APPELLATE
DIVISION
)
In the appeals of:
TRANSOL BUNKER B.V.
Appellant
and
MOTOR VESSEL "ANDRICO
UNITY"
HER OWNERS AND ANY PARTIES
INTERESTED IN HER
Respondent
and
GRECIAN-MAR S R L
Appellant
and
MOTOR VESSEL "ANDRICO
UNITY
"
HER OWNERS AND ANY PARTIES
INTERESTED IN HER
Respondent
CORAM
: CORBETT, HOEXTER, E
M GROSSKOPF, MILNE JJA, et NICHOLAS AJA.
DATES OF HEARING:
7 and 8
November 1988
DATE OF JUDGMENT
: 29 March
1989
2
JUDGMENT
CORBETT
JA:
On 5 April 1984 the motor vessel
Andrico Unity
("the vessel"), while in Table Bay
Harbour, was arrested in an action in
rem
in pursuance of an
order granted in the Cape of Good Hope Provincial Division, in the
exercise of that Court's admiralty jurisdiction
in terms of the
Admiralty Jurisdiction Regulation Act 105 of 1983 ("the Act").
The order of arrest was made at the instance
of Grecian-Mar SRL
("Grecian-Mar"), of Buenos Aires, Argentina, which claimed
in the action payment of US $22 071,10 in
respect of necessaries,
being stores and provisions, supplied to the vessel by Grecian-Mar at
the ports of Villa Constitucion and
Buenos Aires in Argentina during
November 1983. On 13 April 1984 the vessel was also arrested in
rem
by order of the same Court at the instance of Transol Bunker BV
("Transol") of Ridderkerk, Holland, which
3 claimed in its action payment of
US $73 554,35 in respect of bunkers (fuel oil and gas oil) supplied
to the vessel during November
1983, also at Villa Constitucion and
Buenos Aires.
The vessel was
released from arrest after security had been furnished. Thereafter
the owners of the vessel, a Panamanian company known
as Geranium
Maritime SA, made separate applications for the discharge of the
orders of arrest. The applications were heard simultaneously
by
Marais J, inasmuch as the issues arising were the same in both
applications. The learned Judge granted the applications with costs.
His careful and comprehensive judgment has been reported: see
Transol
Bunker BV v MV Andrico Unity and Others: Grecian-Mar SRL v MV Andrico
Unity and Others
1987 (3) SA 794
(C).
I
shall call this "the reported judgment".
With leave of the Court a
quo
Grecian-Mar and Transol now each appeals to this Court against the
4 whole of the judgment and order
of Marais J.
By agreement between the parties
the issues which the Court a
quo
was asked to decide were
limited to two (see reported judgment at p 789 F-H). The appeal
relates only to the second of these issues.
Before stating this issue
it is necessary to refer to certain provisions of the Act and some of
the background facts.
The object of the Act, according
to its long title, is to provide for the vesting of the powers of the
admiralty courts of the Republic
in the provincial and local
divisions of the Supreme Court, and for the extension of these
powers; for the law to be applied by,
and the procedure applicable
in, these divisions; for the repeal of the Colonial Courts of
Admiralty Act, 1890, of the United Kingdom,
in so far as it applies
to the Republic; and for incidental matters. Prior
5 to the commencement of the Act
on 1 November 1983 the position was as set out in
Malilang and
Others v MV Houda Pearl
1986
(2) SA 714
(A), at pp 722 J - 723 C. That is, the jurisdiction of the
South African courts of admiralty was governed by the Colonial Courts
of Admiralty Act, 1890, of the United Kingdom, which conferred upon
them the same admiralty jurisdiction as that enjoyed by the English
High Court as it existed in 1890. And the law to be applied was
English admiralty law as administered by the English High Court
exercising
admiralty jurisdiction in 1890.
The vesting of
the
powers of the old South
African admiralty courts
in
the provincial and local
divisions of the Supreme
Court
of South Africa is
effected by sec 2 of the
Act,
which decrees that
they
"...shall have
jurisdiction... to hear and determine any maritime claim..,."
6 The definition of "maritime
claim" in sec 1(1) of the Act contains, in sub-paras (a) to (z)
inclusive, a long list of
such claims. In terms of sec 3 a maritime
claim may be enforced by either an action in
personam
or
an action in
rem
.
Sec 3(4) and (5), dealing with
actions
in
rem
, provides as
follows:
"(4) Without prejudice to any
other remedy that may be available to a claimant or to the rules
relating to the joinder of causes
of action, a maritime claim may be
enforced by an action in
rem
-
if the claimant has a maritime
lien over the property to be arrested; or
if the owner of the property to
be arrested would be liable to the claimant in an action in
personam
in respect of the cause of action concerned.
(5) An action in
rem
shall
be instituted by the arrest within the area of
7
jurisdiction of the court
concerned of property of one or more of the following categories
against or in respect of which the claim
lies:
The ship, with or without its
equipment, furniture, stores or bunkers;
the whole or any part of the
equipment, furniture, stores or bunkers;
the whole or any part of the
cargo;
the freight."
Both
Grecian-Mar and Transol rely, at this stage at any rate (see the
reported judgment at pp 796
I
- 797 B), on
the provisions of sec 3(4)(a) in order to sustain the actions in
rem
brought by them. This requires the claimant to have a maritime lien
over the property to be arrested, in this case the vessel.
The term "maritime lien"
is not defined in the Act. Apart from sec 3(4)(a), it occurs in two
other provisions of the Act.
Firstly, ampng the
8
maritime claims listed in sec 1(1)
- under the
definition of "maritime
claim" - is:
"(v) any claim relating to
any maritime lien, whether or not falling under any of the preceding
paragraphs;." And, secondly,
sec 11 (which deals with the
ranking of
claims in regard to a "fund
in a court" resulting from
the sale of arrested property in
terms of sec 9 or in
regard to security given in
respect of property in
connection with a maritime claim
or in regard to the
proceeds of property sold pursuant
to an order or in
the execution of a judgment of a
court in terms of the
Act) lists in subsec (l)(e) -
"claims in respect of any
maritime lien not falling under any category mentioned in any of the
preceding paragraphs".
Thus the maritime lien is by
definition a type of maritime claim and its importance lies in the
facts that -
9 (a) it constitutes one of the
bases upon which a claimant may found an action in
rem
(sec
3(4)(a) ); and
(b) it confers a certain
preference in the ranking of claims in terms of sec 11.
I
shall later
examine more closely the nature of the maritime lien. At this stage,
and in order to delineate the problem which arises
in this appeal, it
suffices to say that in maritime law the term "maritime lien"
denotes a legal concept which appears
to have originated in the 19th
century and which is to be found, sometimes in a slightly different
guise or under a different name,
in the legal systems of many
maritime countries. Different municipal systems of law
(I
use
the word "municipal" here in the conflicts sense: see
Cheshire & North's
Private
International Law
, 11 ed, p 3) accord
the status of a
10
maritime lien to different groups
of maritime claims.
Thus, for example, English
admiralty law has limited
the maritime lien to claims
relating to (1) salvage,
(2) collision damage, (3) seaman's
wages, (4) bottomry,
(5) master's wages and (6)
master's disbursements.
Of these bottomry is now obsolete.
(See
Bankers
Trust International Ltd v Todd
Shipyards Corporation,
The Halcyon Isle
1981 AC
221
(PC), at p 232 H - 233
A.) According to United States
law, on the other
hand, maritime liens arise from a
far wider range of
maritime claims, both in contract
and in tort (see 70
American Jurisprudence 2nd, §
559; Gilmore and Black,
The Law of Admiralty
, 2 ed, pp
627-33). The essential
effect of a maritime lien, in
English admiralty law at
any rate, is that it attaches ex
lege
to the ship or
other property
(for convenience
I
shall merely refer
to the ship) in respect of which
the maritime claim
arose and it follows the ship,
irrespective of changes
11
in
ownership or possession, and irrespective of the state of knowledge
of the new owner or possessor. The lien does not depend on
the lienee
(the holder of the lien) acquiring or retaining possession of the
ship. As
I
have indicated, it enables the
lienee to bring an action in
rem
,
even though no claim in
personam
lies against the owner of the ship and it confers upon the lienee a
certain preference when the ship is sold and there is a limited
fund
for the satisfaction of creditors' claims. The lien is asserted by
the arrest of the ship in a proceeding in
rem
and it then relates back to the time when it first attached.
As regards
the law to be applied by a South African court exercising admiralty
jurisdiction since 1 November 1983, sec 6(1) of the
Act provides as
follows:
â
(1)
Notwithstanding anything to the contrary in any law or the common law
contained
12
a court in the exercise of its
admiralty
juridiction shall -
(a) with regard to any matter
in
respect of which a court óf
admiralty of the Republic
referred
to in the Colonial Courts of
Admiralty Act, 1890, of
the United
Kingdom, had jurisdiction
immediately before the
commencement
of this Act, apply the law which
the High Court of
Justice of the
United Kingdom in the exercise of
its admiralty
jurisdiction would
have applied with regard to such
a matter at such commencement, in
so far as that law can be applied;
(b) with regard to any other
matter,
apply the Roman Dutch law
applicable in the Republic."
I
shall discuss
these provisions later.
In the present case Grecian-Mar
and Transol instituted their respective actions in
rem
by
causing the
Andrico Unity
to be arrested by order of the Court
13
a
quo
on the basis of their
respective claims for the
price of stores and provisions and
bunkers supplied to
the vessel in Argentina. Their
claims for the price
of the goods supplied undoubtedly
constituted maritime claims within the definition in sec 1(1) of the
Act.
This is not in dispute. The
question, however, is
whether these claims gave rise to
maritime liens, thus
grounding the claim by each of the
appellants to be
entitled to institute an action in
rem
against the
vessel in terms of sec 3(4)(a) of
the Act.
A country's municipal system of
law comprises what may be conveniently termed its "domestic"
rules of law, which apply when
there is no foreign element, and the
rules of its private international law (or conflict of laws), which
come into play where there
is a foreign element and which determine
the system of law to be chosen to govern the position where the
domestic rules of the forum
and the relevant rules of the
14 foreign country involved
conflict. In the instant case it is conceded by the appellants that
by the domestic rules of law to be
applied by a South African court,
in the exercise of its admiralty jurisdiction, the claims in respect
of stores and provisions
furnished and bunkers supplied do
not give rise to
maritime liensL Appellants' case
is, however:
That, in accordance with the
applicable principles of private international law, the question as
to whether these claims give rise
to maritime liens must be
determined by reference to the
lex loci contractus
, (perhaps,
more correctly, the proper law of the contracts), ie the law of
Argentina.
That in terms of the law of
Argentina these claims afford each creditor what is termed
"a privileged credit" in
respect of his claim and that a privileged credit under the law
15 of Argentina is the equivalent
of a maritime lien. Although proposition (2) was put in issue by the
affidavits filed, it was agreed
by the parties at the hearing in the
Court a
quo
that the Court
should decide
the
correctness of proposition (1) only; and that, in the event of the
Court holding in favour of the appellants, the question as
to the
existence and nature of a maritime lien in the law of Argentina would
be investigated at the trial action, if not previously
settled by
agreement (see reported judgment at p 798 F-H).
As regards proposition (1), Marais
J held that the matter before him was one in respect of which a court
of admiralty of the Republic,
such as is referred to in the Colonial
Courts of Admiralty Act 1890 of the United Kingdom, had jurisdiction
immediately prior to
the commencement of the Act on 1
16 November
1983; and that consequently he was required by sec 6(1) - quoted
above - to apply the law which the High Court of Justice
of the
United Kingdom in the exercise of its admiralty jurisdiction would
have applied on 1 November 1983, in so far as that law
can be applied
(see reported judgment at p 801
I
-
J). After a full review of the English admiralty law and relying
principally on the majority judgment in
The
Halcyon Isle
,
supra
,
he further decided -
(a) that the question as to
whether the
appellants enjoyed maritime liens
over the vessel in respect of their claims had to be decided by
applying the whole of English admiralty
law, including its conflicts
rules in regard to choice of law (see reported judgment at p 822 D -
823 D); and
17 (b) that
according to English admiralty law (including its rules as to
conflict of laws) the question as to whether a claim arising
from a
contract entered into in a foreign country had the status of a
maritime lien had to be decided by reference not to the
lex
loci contractus
but
to the
lex fori
,
English domestic law (see reported judgment at p 821
I-
J).
It followed that the Court a
quo
was obliged to decline to recognize the Argentine liens as maritime
liens within the meaning of the Act and that, the sole basis
for
the arrests in
rem
having fallen away, the orders
of
arrest had to be set aside (see reported judgment at p 823 D).
At this point
I
would mention that the same issues arose in a case
heard in the Durban and Coast
18
Local Division by Leon J. The
learned Judge in that matter gave judgment a few days after the
judgment of Marais J had been delivered
and came to the same
conclusion as Marais J, though for slightly different reasons. Leon
J's judgment has also been reported: see
Brady-Hamilton Stevedore
Co and Others v MV Kalantiao
1987 (4) SA 250
(D). Leave to appeal
having been granted by the Court of first instance, an appeal was
noted against the judgment of Leon J and the
appeal was set down for
hearing on the day after the date of hearing for the present appeals
in the
Andrico Unity
case. In view of the identity of issues
and because of an overlapping of counsel in both matters, it was
agreed between the parties
that the two cases be heard simultaneously
over the two allotted days.
A separate judgment will be
delivered in the
Kalantiao
matter, merely referring to the
conclusions reached by this Court in the appeals concerning the
Andrico Unity
.
19
I
shall also
give certain directions designed to assist the taxing master in
separating the costs of the two matters. For the sake of
convenience,
however,
I
shall when dealing with the
merits of the appeals concerning the
Andrico
Unity
in this judgment refer to
arguments raised by counsel in both matters.
Counsel for the appellants in both
matters, Mr
Hofmeyr
and with him Mr
Scott
for the
appellants in the
Andrico Unity
appeals and Mr
Scott
alone in the
Kolantiao
appeal, concentrated mainly on seeking
to persuade us that the minority judgment in
The Halcyon Isle
,
supra
, and not the majority judgment, correctly represented
the English admiraity law on the point as at 1 November 1983. On the
other
hand, counsel for the various respondents, Mr
Wallis
in
the appeals concerning the
Andrico Unity
and Mr
Gordon
in the appeal relating to the
Kolantiao
, argued the converse.
Before considering the respective merits of the
20
majority and minority judgments in
The Halcyon Isle
it is necessary to deal with certain
preliminary matters and the arguments raised in relation thereto.
As
I
have indicated, sec 3(4)(a) provides for
the
enforcement of a maritime claim by an action in
rem
if the claimant has a maritime lien
over the property to be arrested. Although it was common cause in the
Courts a
quo
,
in both the
Andrico Unity
matter and the
Kolantiao
matter, that in deciding what was meant by the term "maritime
lien" in sec 3(4)(a) the Judge was required by sec 6(1)(a)
to
look at English admiralty law (including its conflicts rules), on
appeal Mr
Wallis
argued that this approach was incorrect. He submitted -
(a) that this approach reversed
the proper stages of the enquiry by seeking to answer the guestion of
the meaning to be attached to
the
21 relevant words in the Act (viz.
"maritime lien"), which determined the jurisdiction of the
court to entertain an action
in
rem
under
sec 3(4)(a), by
reference to the legal system
which,
in terms of sec 6(1), is to be applied in the event of the court
having such jurisdiction;
that the meaning of "maritime
lien" in sec 3(4)(a) could, and should, be determined merely by
a process of statutory interpretation,
and in this connection it was
of importance that prior to the enactment of the Act our courts
exercising an admiralty juridiction
had recognized only those six
maritime liens accorded such status by English admiralty law
(referred to above); and
that there is no indication in
the Act that
22
it was intended to depart from
this well-established acceptance by our courts as to what was
comprehended by the term "maritime
lien" and that,
therefore, Parliament must have intended "maritime lien" to
be limited to the six categories aforementioned.
Submission (a) above is, in my
opinion, fallacious. Sec 6(1) deals not with jurisdiction, but with
the system of law to be applied.
In terms thereof a provincial or
local division of the Supreme Court is required in the exercise of
its admiralty jurisdiction to
apply English admiralty law, as it was
on 1 November 1983, with regard to "any matter" (Afrikaans:
"enige aangeleentheid")
in respect of which a pre-1983
South African court of admiralty, established under the Colonial
Courts of Admiralty Act 1890, had
jurisdiction immediately prior to 1
November
23
1983; and with regard to any other
matter to apply Roman-Dutch law. The "matter" in issue in
the present case is whether
the orders of arrest made by the court of
first instance in terms of sec 3(4)(a) to enable the claimant to
institute an action in
rem
should be set aside on the ground
that the claimant did not have a maritime lien over the property
arrested, ie the vessel. In my
view, this is eminently a matter over
which such a pre-1983 South African court would have had
jurisdiction. Such a court administered
English admiralty law as it
was in 1890 and this comprehended actions in
rem
founded upon
the existence of a maritime lien. Conseguently, the issue as to
whether a particular claim gave rise to a maritime lien
and,
therefore, entitled the claimant on that ground to bring an action in
rem
would clearly have been a matter cognisable by such a
court. The issue relates to the right of the claimant to pursue a
certain remedy,
viz.
24
an action in
rem
,
rather than the jurisdiction of the
Court
to entertain the suit. And even if the result of the Court deciding
that no maritime lien exists can be regarded in effect as
a denial of
jurisdiction, a court always has jurisdiction to decide on its own
jurisdiction. It is to be noted that, in addition
to the present case
and the case concerning the
Kalantiao
,
where it was accepted that the issue as to whether recognition should
be given to a foreign maritime lien was, in terms of sec 6(1)(a),
to
be determined in accordance with English admiralty law as at 1
November 1983 (see reported judgment at p 801 F-I and the
Kalantiao
judgment at p 253 F-H), there is also the judgment of Nienaber J in
Oriental Commercial and Shipping Co Ltd
v M
V
Fidias
1986 (1) SA 714
(D), in which a similar approach was adopted (see pp
716 C-E, 718 G-H).
As to submissions (b) and (c)
above, what
25
they amount to is the proposition
that prior to the commencement of the Act South African courts of
admiralty, administering English
admiralty law, perforce recognized
only the six aforementioned categories of maritime lien; and that,
accordingly, it is this
numerus clausus
that the Legislature
intended when it used the term "maritime lien" in clause
3(4)(a). There is, in my view, no substance
in this line of argument.
It is true that where no foreign element was involved such a South
African court of admiralty would have
been confined to this
numerus
clausus
, but where a foreign element was involved such an
interpretation would amount, in my view, to attributing to the
Legislature an intention
to exclude the possible recognition of
foreign maritime liens by way of the application of the principles of
private international
law relating to choice of law. This appears to
me to be a very improbable state of
26
affairs. Prior
to the Act the South African courts of admiralty applied English
admiralty law and this included the relevant principles
of English
private international law (cf
Malilang
and Others v MV Houda Pearl
,
supra
,
at p 723 E-H). This would have covered a question such as whether a
foreign maritime lien should receive recognition for the purposes
of
an
action in
rem
or the ranking of claims. The
interpretation
suggested by Mr
Wallis
would mean that the Act brought about a radical alteration of this
pre-Act position by excluding in this sphere the application of
the
principles of private international law. Had this been the intention
I
would have expected a clearer indication
of this in the Act.
Moreover, the whole argument seems
to me to beg the question. If prior to 1 November 1983 English
admiralty law (including its rules
of private international law)
reguired South African courts of
27
admiralty to give recognition to
foreign maritime liens, then on counsel's argument the words
"maritime lien" in sec 3(4)(a)
would have to be construed
as including such liens. The whole question is whether South African
courts of admiralty then, and now,
are
so required to give
recognition to foreign maritime liens.
I,
therefore,
conclude that the Court a
q
uo
and the Court in the
Kalantiao
case correctly approach-ed the issue on the basis that, in terms of
sec 6(1)(a), it had to be resolved by reference to the law applied
by
the English High Court exercising admiralty jurisdiction as at 1
November 1983 and that this reference comprehended both dómestic
rules of law and the relevant principles of private international
law.
It was submitted, on the other
hand, by appellant's counsel that there were indications in the
28
Act itself (see
para. (v) of the definition of "maritime claim" in sec 1
and sec 11(1)(e), quoted above) that it was intended
that recognition
be given to categories of maritime lien outside the
numerus
clausus
laid down by English admiralty
law. Initially
I
understood appellant's
counsel to use these alleged indications positively in support of the
recognition of foreign maritime liens,
but in the course of argument
he conceded that they merely showed that the Act had "left the
door open" in this regard.
I
do not find
it necessary to discuss the arguments adduced in support of this
submission, or the counter-arguments raised by counsel
for the
respondents. If at its highest the submission amounts to no more than
that there was an intention on the part of
the Legislature to leave the door open, then it really takes the
matter no further. The
question remains: what does the English law as
applied by the
29
English courts
exercising admiralty jurisdiction prescribe? To this question
I
now turn.
The logical
starting point in an endeavour to answer this question is the
decision of the Judicial Committee of the Privy Council
in
The
Halcyon Isle
,
supra
.
This was an appeal from the Court of Appeal in Singapore. The vessel
in question, a British ship called the
Halcyon
Isle
, had been arrested in Singapore in
an action in
rem
instituted in the High Court of Singapore by the appellant, an
English bank, which held a mortgage on the
vessel. Subsequently, the vessel was sold
by order of court for a sum insufficient to satisfy in full the
claims of all the creditors
of her owners. The respondent, a ship
repairer, had executed certain repairs to the vessel in its shipyard
in New York. Under United
States law the respondent was entitled to a
maritime lien for the price of the
30
repairs and it applied to the High
Court for a declaration that it was so entitled in terms of the law
of Singapore. The appellant
intervened and applied for a
determination of the priority of payments from the proceeds of the
sale of the vessel. The High Court
decided that the respondent was
not entitled to a maritime lien under Singapore law, with the result
that the appellant's (mortgagee's)
claim took priority over
respondent's. The Court of Appeal in Singapore reversed this
decision. On appeal the Privy Council by a
majority of three (Lord
Diplock, Lord Elwyn-Jones and Lord Lane) to two (Lord Salmon and Lord
Scarman) allowed the appeal and restored
the judgment of the High
Court.
As regards the point in issue
there was no relevant difference between the law of Singapore and the
law of England. Indeed, in his
judgment Lord Diplock used the
expression "English law" as embracing
31 the law of Singapore (see p 229
H). That was also the view of the minority (see p 242 F). The case
may, therefore, be regarded
as a decision by the Privy Council on
English admiralty law.
Early in his judgment Lord Diplock
identified the problem and the possible solutions of it. While
priorities between claimants to
a limited fund which is being
distributed by a court of law are matters of procedure, which under
English rules of conflict of laws
are governed by the lex
fori
,
in the case of a ship the classification of claims against its former
owner for the purpose of determining priorities in the proceeds
of
its sale may raise a further problem of conflict of laws, since
certain claims may have arisen within the territorial jurisdiction
of
foreign countries, which may assign legal consequences to the claims
different from those under English law. So far an English
distributing court, faced with the problem
32
of classifying foreign claims in
order to determine priorities under the
lex fori
, the choice,
said Lord Diplock (at p 230 E-G) -
" would appear to lie
between (1)
on the one hand
classifying by reference
to the events on
which each claim was founded and giving to it the priority to which
it would be entitled under the lex fori if those
events had occurred
within the territorial jurisdiction of the distributing court; or (2)
on the other hand applying a complicated
kind of partial renvoi by
(i) first ascer-
taining in respect of each
foreign claim the legal consequences,
other
than those
relating to
priorities in the distribu-tion of
a
limited fund
,
that would be attributed under its own lex causae to the events on
which the claim is founded; and (ii) then giving to the foreign
claim
the priority accorded under the lex fori to claims arising from
events, however dissimilar, which would have given rise to
the same
or
analogous legal consequences if they had
occurred within the territorial
juris-diction of the distributing court. To
omit
the dissection of the lex causae
of the
claim that the second choice prescribes and to say instead that if
under the lex causae the relevant events
would give rise to a maritime lien, the
33
English court must give to those
courts (sic: "claims"?) all the legal conse-quences of a
maritime lien under English law,
would, in their Lordships' view, be
too simplistic an approach to the questions of conflicts of law that
are involved."
For reasons
which
I
shall summarize later Lord Diplock
and his two colleagues preferred
the first of these al-
ternative choices.
In their dissenting judgment Lord
Salmon and Lord Scarman identified the issue as follows (at p 242 F)
-
"The issue is: when a ship is
sold by order of the court in a creditor's ac-tion in rem against the
ship and the proceeds of
sale are insufficient to pay all creditors
in full does a ship-repairer, who has provided his services and
materials abroad and has
by the lex loci the benefit of a maritime
lien, enjoy priority over a mortgagee? Or is his foreign lien to be
disregarded in determining
his priority?"
Having considered the issue on
principle and by
34
reference to authoritý,
their Lordships concluded as follows (at p 250 D):
"A maritime lien is a right
of property given by way of security for a maritime claim. If the
Admiralty court has, as in the
present case, jurisdiction to
entertain the claim, it will not disregard the lien. A maritime lien
validly conferred by the lex loci
is as much part of the claim as is
a mortgage similarly valid by the lex loci. Each is a limited right
of property securing the claim.
The lien travels with the claim, as
does the mortgage: and the claim travels with the ship. It would be a
denial of history and principle,
in the present chaos of the law of
the sea governing the recognition and priority of maritime liens and
mortgages, to refuse the
aid of private international law.
For these reasons, we think that
the Court of Appeal reached the correct conclusion and would dismiss
the appeal."
I
would just
add that the minority were agreed that
the actual order of priority of
rights which exist
against a ship was, according to
English law, to be
decided by the
lex fori
(see p 246 F). This is
35
nowhere in dispute.
As the aforegoing synopsis of the
case indicates,
The Halcyon Isle
,
supra
, was concerned
primarily with the ranking (or priority) of claims in the
distribution of a fund created by the sale of a vessel arrested
in an
action in
rem
and not, as is the present case, with the right
or
locus standi
of a claimant to bring an action in
rem
.
Common to both these enquiries, however, is the basic question as to
whether the court hearing the matter should, in accordance
with the
rules of private international law, give recognition to a foreign
maritime lien arising in accordance with the
lex loci contractus
,
but not having that status according to the domestic rules of the
lex
fori
. And in dealing in his judgment with the issue of
priorities, Lord Diplock emphasized the dual characteristics of a
maritime lien:
namely, its enforceability by an action in
rem
against the ship,
36
notwithstanding the subsequent
sale of the ship to a third party and the ignorance of such third
party; and, secondly, its status
in the order of priorities in the
distribution of a limited fund (see p 234 B-E). His Lordship further
warned (at p 235 B-C) that
the recognition of any new class of claim
arising under foreign law as giving rise to a maritime lien in
English law because it does
so under its own
lex causae
would
not only affect the question of priorities but also extend the
classes of persons entitled to bring an action in
rem
against
a particular ship. He concluded that, in principle (at p 235 E) -
" the question as to the
right to
proceed in rem against a ship as
well as priorities in the distribution between competing claimants of
the proceeds of her sale in
an action in rem in the High Court of
Singapore falls to be determined by the lex fori, as if the events
that gave rise to the claim
had occurred in Singapore."
Having thereafter considered the
English
37
authorities on the point, Lord
Diplock stated (at pp 238 H - 239 A):
"In their Lordships' view the
Eng-lish authorities upon close examination support the principle
that, in the ap-plication of
English rules of conflict of laws,
maritime claims are classified as giving rise to maritime liens which
are enforceable in actions
in rem in English courts where
and only
where
the events on which the claim is founded would have given
rise to a maritime lien in English law, if those events had oc-curred
within
the territorial jurisdiction of the English court."
It is thus clear that in the view
of the majority in
The Halcyon IslS
;
supra
, these two
characteristics of a maritime lien go hand in hand; and that if legal
effect be given to a foreign maritime lien (not
recognized by the
domestic rules of English law) because it enjoys status as such
according to the
lex
loci
contractus
, this will be so
for the purpose of both prioritiss and the right to bring an action
in rem; and vice versa. There is no possibility
of
37 A
recognition or non-recognition of a foreign lien for one of these
purposes and not for the other. Indeed, it seems most unlikely
that
English law, or any other cognate system of law, would have one rule
for priorities and another (different) rule for
locus
standi
to bring the
action in rem
.
Conse-quently, although the actual decision in
The
Halcyon Isle
,
supra
,
may be confined to priorities and Lord Diplock's find-ings in regard
to the right to bring an action in
rem
may, strictly speaking, be
obiter
(a point upon which
I
do
not find it necessary to express an opinion), it is clear that
The
Halcyon Isle
,
supra
,
is nevertheless an authority of prime importance in regard to the
issue in the instant case, and in the K
alantiao
case.
Of course, as correctly pointed
out by Marais J in the Court a
quo
(see reported judgment at p
803 G-H) and Leon J in the
Kalantiao
case (
supra
, at p
253 G-I), what a South African court exercising admiralty
jurisdiction is required by sec 6(1) to do is to apply -
38
"....the law which the High
Court of Justice of the Unitêd Kingdom in the exercise of its
admiralty jurisdiction would
have applied...."
This means that the South African
court must ascertain
and apply the authoritative
statements of the English
law on the subject by the Courts
comprising the High
Court of Justice of the United
Kingdom. Although
strictly the High Court of Justice
is separate from the
Court of Appeal (see sec 1(1) of
the English Supreme
Court Act 1981, Chap 54),
obviously an authoritative
statement of the relevant law by
the Court of Appeal
or, a
fortiori
the House of
Lords, which would be
binding on the High Court, would
be wholly pertinent.
The Judicial Committee of the
Privy Council, on the
other hand, is not part of the
appellate hierarchy of
the English Supreme Court: it is
the final court of
appeal for certain Commonwealth
countries, British
colonies and dependencies, the
Channel Islands and the
39
Isle of Man. Consequently its
decisions, though of great persuasive force, are not binding on the
High Court, the Court of Appeal
or the House of Lords. (See generally
the
Kalantiao
case,
supra
, at p 254 J - 255 H and the
authorities there cited.)
In the case of
Van der Linde v Calitz
,
1967 (2) SA 239
(A), this Court was, in effect, required by statute
to apply, in regard to a matter which related to the law of evidence,
the law
applied by the English Supreme Court of Judicature. There
were two relevant authorities, one a
decision of the House of Lords in 1942 and
one a decision of the Privy Council in 1931, which conflicted with
one another on a vital
point. This Court preferred to follow the
decision of the Privy Council. In delivering the judgment of the
Court, Steyn CJ accepted
(at pp 250 F - 251 D) that what was held in
the House of Lords case would be binding on the English courts
comprising the Supreme
40
Court of Judicature, but
emphasized that by reason of the statutory provisions which made the
Privy Council until 1950 (when the appeal
to the Privy Council from
the Appellate Division was abolished by Act 16 of 1950) the final
court of appeal for South Africa, it
(ie the Privy Council) had the
final say, as far as our law was concerned, as to what the English
law of evidence on the point was.
Had the point arisen prior to 1950
(reasoned Steyn CJ), then this Court would have been obliged to
follow the Privy Council decision
rather than that of the House of
Lords. The lapse of the appeal to the Privy Council in 1950 did not
result in the former decisions
of that Court being deprived of their
authority. They remained decisions of a former highest Court and they
carried no less weight
than the décisions of the Appellate
Division itself. Steyn CJ continued (at p 251 E):
"Genoemde Wet het na my
mening nie die
41
uitwerking dat vorige uitsprake
van die 'House of Lords' vir ons Howe meer bindâ end geword het as
wat hulle was toe die Geheime
Raad nog ons hoogste Hof was nie. Die
eintlike vraag is dus nie of hierdie Hof die
Duncan
-uitspraak
as 'n juiste weergawe van die Engelse bewys-leer moet aanvaar nie,
maar of hy die weergawe daarvan in die
Robinson
-saak as 'n
duidelike mistasting moet verwerp ten gunste van eersgenoemde
weergawe."
I
agree with
the following view expressed by
Leon J in the
Kalantiao
case (at p 257 J):
"Whatever
justifiable criticisms may be made of the decision in
Van
der Linde v Calitz
,
I
do
not understand the case
to go further than
to hold that the pre-1950 Privy Council decisions will be re-
garded
by the Appellate Division as being on a par with its own decisions.
I
do not read the judgment as conferring
any
status on later Privy Council deci-
sions
beyond their persuasive force...."
The majority judgment in
The
Halcyon Isle
,
supra
, is
consequently not binding on this
Court, in the sense
that it has the status of one of
this Court's own
decisions and can only be departed
from if shown to be
42
palpably wrong: it merely has
persuasive force.
The degree of
persuasive force of a judgment normally depends upon the standing of
the Court from which it emanates and upon the intrinsic
cogency of
its reasoning. As
I
have already remarked,
although the
Privy Council is not part of
the English Supreme Court
hierarchy and its
decisions are not binding on the English courts, such decisions are
nevertheless accorded "the greatest attention
and respect"
by the English courts (see
Stephenson v
Thompson
[1924] 2 KB 240
, at p 246).
In the result
The Halcyon Isle
,
supra
, though not a binding precedent, is an authority to
which the greatest attention and respect must be paid when seek-ing
to determine
what rule of law would be applied in this case by an
English court exercising admiralty ju-risdiction. This, of course, is
no easy
task for a
43
South African
court; and it is a task made even more difficult by the facts (i)
that the Privy Council was in this case so crucially
and narrowly
divided on the basic issue confronting it; and (ii) that there has
been widespread criticism of the judgment of the
majority,
particularly by academic writers.
I
must
nevertheless do the best
I
can under the
circumstances.
I
proceed now
to examine more closely the reasons which led Lord Diplock and the
two Law Lords who concurred in his judgment to conclude
that
according to English admiralty law the question as to whether a claim
based upon a foreign contract should be classified as
a maritime lien
was to be determined by the
lex fori
,
ie by the domestic rules of English admiralty law.
As
I
have indicated, Lord Diplock approached the matter
firstly on principle and secondly by
44
reference to
English authority. After remarking that the first alternative, ie
classification by reference to the
lex
fori
, had the merit of simplicity, his
Lordship proceeded to advance what appear to be basically three
reasons for concluding that what
I
shall,
for the sake of brevity, call "the
lex
fori
approach" was the correct one
in principle.
The first of these reasons (which
appears at pp 230 H- 231 G) has reference to the general choice of
law rule in English private international
law, viz that a foreign
contract is given the same legal consequences as would be accorded to
it under its proper law (see Dicey
and Morris
The Conflict of
Laws
, 11 ed, Rule 186(1), p 1236); and the rationale of the rule,
viz. that by its application the legitimate expectations of the
parties
to the contract as to their rights
inter se
will not
be defeated by any change of the forum in which such rights have to
be enforced.
45 In this connection Lord Diplock
makes the point that where the court is dealing with the distribution
of a limited fund, insufficient
to pay in full all creditors, it is
no longer concerned with merely enforcing the individual creditors'
contractual rights against
the debtor: it is primarily concerned with
"doing even-handed justice" between competing creditors. In
the circumstances
rights of priority accorded to creditors
inter
se
are not the rights of
parties to a contract against one another, but rather the rights as
between a party to a contract and strangers
to the contract, viz
other creditors.
This point appears to be a valid
one in that the rationale given for the principle expressed by Dicey
and Morris in Rule 186(1) does
not appear to apply in such a
situation. This reasoning would not, of course, apply to a foreign
maritime lien, based upon tort or
quasi-contract, which did not fall
within the
46
numerus clausus
recognized
by the domestic rules of
English laws. Moreover, in the
minority judgment in
The Halcyon Isle
,
supra
, the
following counter-argument is raised: that if English law failed to
recognize a maritime lien created by the
lex loci contractus
,
where no such lien existed by internal English law, "injustice
would prevail". In the instant case the respondent (the
New York
ship-repairer) would be deprived of its maritime lien -
"...valid as it appeared to
be throughout the world, and without which they would obviously never
have allowed the ship to sail
away without paying a dollar for the
important repairs upon which the ship-repairers had spent a great
deal of time and money and
from which the mortgagees obtained
substantial advantages." (See pp 246 H - 247 A.)
In regard to this latter point,
their Lordships are at
odds with one another on the
facts. Lord Diplock,
describing the respondent as
"experienced litigants in
47 courts of admiralty",
suggests that respondent was well aware, when it allowed the
Halcyon
Isle
to leave its repairyard
and thereby relinquished its possessory lien for unpaid work, that
that part of the
lex causae
which accorded rights of priority over other classes of creditors in
the distribution of a limited fund resulting from an action
in
rem
against the vessel would be compelled to yield to the
lex
fori
of any
foreign
court in which the action in
rem
might be
brought.
Respondent, or its lawyers, would also know that the priorities as
between various kinds of maritime claims accorded by the
lex
fori
were subject to
considerable variation as between one country and another (see p 231
D-G). This general suggestion is controverted
in the minority
judgment, which places emphasis,
inter alia
upon a non-waiver clause in the ship repair contract as indicating
the importance which the respondent attached to their maritime
lien
(see p
48 247 B-D).
It seems to me,
with respect, that the state of mind of a particular claimant should
not be allowed to influence a question of principle,
ëxcept
perhaps in so far as that might be indicative of a general state of
affairs. Generally speaking,
I
would
imagine that persons who have commercial dealings with ships, such as
mortgagees and necessaries men, would be aware of the
attitude
adopted by the courts of the major trading nations, including the
English courts, to the recognition of foreign maritime
liens and
would realise that they could.not necessarily rely upon a maritime
lien granted by the
lex loci contractus
being recognized as such in a foreign forum. In any event, it does
not seem to me that this is a factor of prime importance in
determining
this guestion of principle.
48A
More importaht it seems to me is
the point that the recog-nition of a foreign maritime lien (not
accorded that status by the law of
the forum) affects the right of
strangers to the contract giving rise to the lien, where the court is
dealing with the distribution
of a limited fund. Bearing in mind that
the proper law of the contract may be one chosen by the parties, the
anomaly of thus sub-jecting
a stranger to the proper law so selected
becomes all the more apparent.
Secondly, Lord Diplock, having
traced briefly the history of the maritime lien and its relation to
the ranking of claims for the purpose
of priority in
/ the
49
the distribution of a limited fund
(a "complicated" matter), emphasizes that these priorities
bear no relation to, and cannot
be explained by, the general rule
applicable to other charges on property as security for a debt, viz
qui prior est tempore potior est jure
. Thus the owner of a
ship which has become the subject of a maritime lien can create a
charge on the
whole
property in the ship which will rank in
priority to the existing lien; it is accordingly inaccurate to speak
of a maritime lien -
as did Gorrell Barnes P in
The Ripon City
[1897] P 226
at 242 - as being "a subtraction from the absolute
property of the owner in the thing". Lord Diplock further refers
to
the fact that under English admiralty law and practice the six
recognized classes of maritime lien take priority over claims under
mortgages in the distribu-tion of a limited fund by the court, and
mortgages
50
themselves rank in priority to all
classes of claims not giving rise to maritime liens. (See generally
pp 231 H - 233 H.) His Lordship
concludes (at p 234 A-B):
"The pattern of priorities,
which has been applied by the English Admiralty Court in the
distribution of the fund representing
the proceeds of sale of a ship
in an action in rem, thus affords no logical basis for concluding
that, if a new class of claim additional
to the six that have
hitherto been recognised were treated under its own lex causae as
having given rise to a maritime lien, this
should have any effect on
its ranking for the purpose of priority under the lex fori in the
distribution of the fund by the court
and, in particular, no logical
basis for concluding that this should entitle it to priority over
mortgages."
In this connection there are
certain observations to be made. The first of these relates to
nomenclature. In the passage just quoted
and . elsewhere in his
judgment Lord Diplock refers to the
51
lex causae
.
This must be taken to denote the
lex loci contractus
,
the term used in the minority judgment. The
lex causae
is normally understood to mean the system of law (usually but not
necessarily foreign) which governs the question (see Dicey and
Morris, op
cit
, p
29). This is, of course, the very question to be determined in a
conflicts matter. It would perhaps be more accurate in this context
to speak of the proper law of the contract, rather than the
lex
loci contrac-tus
, since it is
generally the proper law which deter-mines the legal effect of a
contract in a conflicts situation and since the proper
law and the
lex loci contractus
need not necessarily coincide (see Dicey and Morris, op
cit
,
p 1166). In the case of the repairs to the
Halcyon Isle
American law was clearly both the proper law and the
lex
loci contractus
: consequently
the use of the latter term is not inappropriate.
The second observation is that a
rejection
52
of the
lex
fori
approach and an acceptance of the
views of the minority in
The Halcyon
Isle
, supra,(which
I
shall
call for the sake of simplicity "the
lex
loci
approach") will usually lead
to British creditors being placed at a disadvantage
vis
-á-
vis
some of their counterparts in foreign countries. Take, for example, a
ship mortgaged in England to an English creditor, which is
furnished
with necessaries successively by an English supplier at an English
port and an American supplier at a port in the United
States of
America. In the event of the ship being arrested and sold in
pursuance of an action in
rem
instituted in an English
court, the
application of the
lex loci
approach (postulating that under United States law a necessaries man
enjoys a maritime lien - see Gilmore and Black, op
cit
,
at pp 630, 652-3) will result in the American necessaries man
enjoying priority in regard to the proceeds of the ship not only over
the British
53
necessaries
man, but also over the British mortgagee, who in terms of the
lex
fori
would himself have
priority
over a necessaries man (see
The Halcyon
Isle
,
supra
,
at p 233 G). This emphasizes the close correlation between priorities
and according a particular kind of maritime claim the status
of a
maritime lien. And it fortifies the contention that, since priorities
are governed by the
lex fori
,
recognition of a claim as giving rise to a maritime lien should
likewise be governed by the
lex fori
.
I
shall revert to this point later.
The third observation to be made
is that the British claimant who would thus be forced to concede
priority to his American counterpart
by the adoption of the
lex
loci
approach, would gain no correlative advantage were the
situation to be reversed and the. suit to come before a United States
court.
Assuming the latter were also to apply the
lex loci
approach,
54 as would seem to be the
position (see Tetley,
Maritime Liens and Claims
,
pp 532 and 622), it would accordingly hold that in terms of the
lex
loci contractus
(English law)
the British necessaries man held no maritime lien over the vessel,
whereas his American counterpart did. And the British
mortgagee would
likewise be at a disadvantage.
In the judgment of the minority in
The Halcyon Isle
,
supra
, it is státed that,
inter alia
, comity of nations, private international law and
natural justice require the adoption of the
lex loci
approach
(see p 246 G). It seems to me, however, with respect, that as long as
there continue to be major differences between the
domestic rules of
the legal systems of countries as to what classes of maritime claims
should be recognized as giving rise to maritime
liens, the
lex
loci
approach is no more likely to produce uniformity of
treatment, equity or natural
55 justice than the
lex fori
approach.
In the reported judgment (at pp
811 H - 812 A) Marais J makes the following point:
"If a
Court does recognise a foreign
maritime
lien which arose in circumstan-ces which would not give rise to a
mari-
time lien under the
lex
fori
and there
are
other competing maritime liens which
arose
under the
lex fori
,
by what prin-
ciple does the Court decide
what ranking
should be assigned to the
foreign lien
within the class of
maritime liens
?
There
is as little logical justification
for
assigning it first place within the class as there is for assigning
it last place within the class. It is here,
I
think,
that the approach favoured by the minority in
The
Halcyon Isle
, namely as-signing
priority by reference to the le-
gal
consequences of the foreign law rather than by reference to the
events giving rise to those consequences, breaks down and becomes
guite unworkable. In other words, while the classification by
reference to legal consequences may enable one to say that the
foreign
rights are similar to those which a domestic maritime lien
gives, and may therefore provide superficial justification for
assigning
it to that class of claim, it will not enable one
56
to say that the foreign rights are
similar to those which a domestic maritime lien gives, and may
therefore provide super-ficial justification
for assigning it to that
class of claim, it will not enable one to say what ranking within the
class of maritime liens the foreign
claim should enjoy."
I
am not sure
that the problem of assigning a ranking to a
foreign lien (not recognised by
English domestic law) within
the class of maritime liens would
be quite as difficult as
Marais J suggests. It would seem
that in regard to ranking
the English admiralty courts have
adopted -
"a broad discretionary
approach with rival claims ranked by reference to considerations of
eguity, public policy and commercial
expediency, with the ultimate
aim of doing that which is just in the circumstance of each case.
This is not however to suggest that
the law is capricious, erratic or
unpredictable. Arising from the 'value' framework within which the
Courts operate there have emerged
various principles which are
capable of providing reliable signposts to the likely attitude of the
Courts. Such indeed, on occasions
is the degree of predictability
that many commentators have been tempted to repre-sent the operative
principles as firm 'rules of
ranking'. Whilst this approach
56A
is understandable it would appear
not
to be strictly accurate, for such
'rules
of ranking' are no more than
visible mani-
festations of an underlying
equity, policy
or other consideration."
(See Thomas,
Maritime Liens
,
p 234).
It is true that in particular
instances the application of
these principles has resulted in
the formulation of certain
rules or guidelines (see Thomas,
op
cit
, pp 244-50), but
they would not appear to be
immutable. The assignment of
a foreign lien (not recognized by
English domestic law) to
a place in the order of ranking,
would present problems were
the
lex
loci
approach to be adopted, but
I
do not think thát
the problems would be
insurmountable. Naturally the
vast range of claims recognized by
the legal systems of
some countries as giving rise to a
maritime lien or the
legal equivalent thereof (as to
which see the summary in Tetley, op
cit
, at pp 556 ff) would
tend to multiply these problems.
57
The third reason given by Lord
Diplock for preferring, in principle, the
lex fori
approach
appears from pages 234-5 of the judgment. After referring to the
peculiar characteristic of a maritime lien that it continues
to be
enforceable by an action in
rem
against the ship,
notwithstanding the sale of the ship to a third party and
notwithstanding that the purchaser had no notice of the
lien and no
personal liability on the claim, his Lordship remarks that this
characteristic
"...
points in the direction of a maritime
lien
partaking of the nature of a proprietary right in the ship"
and states further that the
characteristic should not
be overlooked in any consideration
of how a claim,
which under its own
lex causae
would be treated as
having the same legal conseguences
as those of a
maritime lien in English law, is
to be classified under
English rules of conflict of laws
for the purpose of
58
distribution of a fund under
Singapore (ie English) law as the
lex fori
. Lord Diplock then
proceeds (at p 234 F-H):
"As explained in the passage
from
The
Bold Buccleugh
[1851] EngR 985
; ,
7 Moo. P.C.C. 267
, 284 that
has already been cited, any charge that a maritime lien creates on a
ship is initially inchoate only; unlike a mortgage
it creates no
immediate right of property; it is, and will continue to be, devoid
of any legal consequences unless and until it is
'carried into effect
by legal process, by a proceeding in rem'.. Any proprietary right to
which it may give rise is thus dependent
upon the lienee being
recognised as entitled to proceed in rem against the ship in the
court in which he is seeking to enforce his
maritime lien. Under the
domestic law of a number of civil law countries even the inchoate
charge to which some classes of maritime
claims give rise is
evanescent. Unless enforced by legal process within a limited time,
for instance, within one year or before the
commencement of the next
voyage, it never comes to life. In English law, while there is no
specific time limit to a maritime lien
the right to enforce it may be
lost by laches.
If and when a maritime lien is
59
carried into effect by legal
process, however, the charge dates back to the time that the claim on
which it is founded arose."
Having remarked
(as
I
have indicated) that this
characteristic of a maritime lien - "unique in English law"
- has the result that the recognition
of a new class of claim,
arising under a foreign law, as giving rise to a maritime lien in
English law not only may affect priorities
but also may extend the
classes of persons entitled to bring an action in
rem
against a particular ship, Lord Diplock concludes as follows (at p
235 D):
"But any question as to who
is entitled to bring a particular kind of proceeding in an English
court, like questions of priorities
in distribution of a fund, is a
question of jurisdiction. It too under English rules of conflict of
laws falls to be decided by English
law as the lex fori."
60
Subsequently, after discussing
certain earlier decisions on maritime liens, Lord Diplock states,
with reference to the case of
The Tervaete
[1922] P 259
(CA)
and the three judgments delivered therein by Bankes LJ, Scrutton W
and Atkin LJ (see p 238 B) -
"The reasoning of all three
judgments is consistent only with the characterisation of a maritime
lien in English law as involving
rights that are procedural or
remedial only, and accordingly the question whether a particular
class of claim gives rise to a maritime
lien or not as being one to
be determined by English law as the lex fori."
61
The Tervaete
,
supra
,
was concerned with the right to bring an action in
rem
.
Lord Diplock thus appears to
advance two bases for concluding that the issue as to the recognition
of a foreign maritime lien should
be determined in accordance with
the domestic rules of the
lex fori
: (i) that it involves a
question of jurisdiction, and (ii) that in English law a maritime
lien involves rights that are "procedural
and remedial only".
These propositions require examination.
In essence the conflicts process
arises whenever the case contains a foreign element which raises the
possibility of the court constituting
the forum being directed by its
own rules of private international law to the principles of a foreign
system of law in order to decide
the case. Postulating that the court
has jurisdiction, the first step in the
62
process is one of classification,
or characterization, in order to determine the appropriate rule as to
choice of law; and, as is
pointed out by Cheshire and North,
op
cit
, at pp 43 ff, such classification may take place at two
stages. Firstly, there is the classification of the cause of action
whereby
the court identifies the main legal category into which the
case falls. This classification will bring into operation a choice of
law rule, which may, through the appropriate connecting factor,
render applicable a foreign system of law. At this stage a second
process of classification may become necessary in order to determine
whether a particular rule of law of the foreign system, raised
by a
party, falls within the general category to which the choice of law
rule relates.
In general it
is,
I
believe, correct to say
that
by English law questions of jurisdiction fall to
63
be decided by
the
lex fori
;
and also that the
lex fori
governs
matters of procedure and remedies. Critics of the majority judgment
in
The Halcyon Isle
,
and counsel for the appellants, take exception, however, to Lord
Diplock's classification of the issues arising in relation to the
recognition of foreign maritime liens - as to whether the lienee is
entitled to bring
an action in
rem
in an English court and as to the
lienee's
ranking in the order of priority of claims under an English
distribution - as bearing on jurisdiction and/or procedure and
remedies. It is argued that a maritime lien confers a substantive
proprietary right and that, consequently, the issue should be
classified
as one relating to the validity and effect of the lien.
This, so it is argued, is a matter
which
in terms of English choice of law rules is determined by reference to
the
lex loci
(or proper law) - in that case American law - and that such
64
reference shows that the
respondent (the New York ship repairer) had a maritime lien over the
Halcyon Isle
.
Ergo
, the lien should have been
recognized by the Singapore court.
It is further argued that it is
inappropriate to use the term "inchoate" to describe a
maritime lien, as was done in the
leading case of
Harmer v Bell,
The Bold Buccleugh
[1843 -
60] All ER Rep 125
(PC), at p 128 C-D
by Jervis CJ and also in
The Halcyon Isle
,
supra
, at pp
232 B-C, 234 F. One of the critics of the majority judgment, Prof D C
Jackson in his
Enforcement of Maritime Liens
, at p 222, asks
whether it is not semantic to draw a distinction between an inchoate
right depending for its substance on the taking
of legal proceedings
and a right of substance which, if necessary, has to be enforced by
legal procedings; and concludes that it
is.
65
In this general
context it is,
I
would suggest, of some
importance to distinguish between what
I
shall
call "the basic event" which gives rise to a maritime lien
- in
The Halcyon Isle
,
supra
, the
contract entered into and performed in New York between the ship
repairer and the owners of the vessel - and the maritime lien
itself.
Clearly an English court applying private international law would
give to the contract itself the contractual consequences
which were
accorded to it by its proper law, viz. American law.
When one comes, however, to the
recognition, or non-recognition, of the maritime lien conferred on
the ship repairer under American
law by reason of the contract one is
dealing with something different. It is a right conferred not by the
contract, but by operation
of law; and it is a right which - whether
correctly to be described as "inchoate" or not - assumes
significance and acquires
content only when the lienee institutes
66
an action in
rem
against
the ship or when priorities must be determined in regard to a limited
fund arising from the sale of the ship. Furthermore,
it is a right
closely connected with the question of priorities, for whether or not
the maritime claim of a creditor is recognized
as conferring a
maritime lien will vitally affect the priority it enjoys, and, of
course, in relation thereto, the ranking of other
claims. As the
facts of
The Halcyon Isle
,
supra
, illustrate, whether a
claim is ranked as a maritime lien may determine whether the claimant
receives anything at all from the limited
fund. And conversely
recognition of a claim as having the status of a maritime lien may
render worthless other claims.
As previously mentioned, it is a
settled rule of English admiralty law that the order of priority in
the ranking of claims to a limited
fund created by the sale of a ship
is that fixed by the
lex fori
: see
The
67
Colorado
[1923] P 102
, at pp 106, 109,
111;
Cheshire
and North, op
cit
, p 88. In order
to explain the reason for the rule Bankes J in
The
Colorado
,
supra
,
quoted with approval the following dictum of Marshall
CJ
in
Harrison v Sterry
[1809] USSC 9
;
(1809) 5 Cranch 289
, at p 298:
"The law of the place where a
contract is made is, generally speaking, the law of the contract - ie
it is the law by which the
contract is expounded. But the right of
priority forms no part of the contract itself. It is extrinsic, and
is rather a personal
privilege dependent on the law of the place
where the property lies, and where the Court sits which is to decide
the cause."
This rationale
would apply with equal cogency to the maritime lien. When accorded in
respect of a contractual claim, the lien forms
no part of the
contract itself; it is extrinsic thereto. And is it not really a
personal privilege dependent on the
lex
fori
?
At any rate, it is,. as
I
have shown,
closely
linked to the matter of priorities.
And there thus
68
seems to be good ground for
holding that, like priorities, the existence of a maritime lien is a
matter for the law of the place where
the court which is to decide
the cause sits. (Cf. the remarks of Jackson,
Enforcement of
Maritime Claims
, at p 326 where he criticizes the distinction
drawn between questions of substance and issues of priority.)
The argument that a maritime lien
constitutes a substantive right and that, therefore, its existence
must be determined by reference
to the
lex loci
, or its proper
law, raises a number of problems. The first of these is what is meant
by the
lex loci
or proper law of the maritime lien? Here one
gathers that the proponents of the argument have in mind the
lex
loci
or proper law of the basic event. The latter may be
contract, quasi-contract or tort. As far as contráct is
concerned, the
argument is apparently founded on the general
principle, already referred to, that the legal
69
effect of a foreign contract is to
be determined in accordance with the proper law of the contract. It
is to be noted, however, that
this principle, as formulated by Dicey
and Morris, op
cit
, p 1236, is confined to the rights and
obligations under the contract of the parties thereto; and it is at
least questionable as
to whether the principle would embrace a
maritime lien which is really extrinsic to the contract itself and
arises by operation of
law. Thus, the identical contract may found a
maritime lien if the proper law be that of one jurisdiction and not
found a maritime
lien if the proper law be that of another
jurisdiction.
Where the basic event consists of
a tort, however, the general principle is not the same and the
argument tends to founder. Collision
damage is an example of a basic
event consisting of a tort, which is recognized as giving rise to a
maritime lien under
70 English law. Other legal
systems would appear to extend the status of maritime lien to
additional tort-ious acts. For instance
under American law a claim
for personal injury gives rise to a maritime lien (see Gilmore and
Black, op
cit
, p 628), but
such a claim
does not fall
within the
numerus clausus
of English law. Conseguently the guestion could arise as to whether
an English admiralty court should recognize as a maritime lien
a
claim based upon personal injury in-flicted in the United States of
America. The English conflicts rule in regard to tort is statêd
by Dicey and Morris, op
cit
,
rule 205, pp 1365-6, as follows:
"(1) As a general rule, an
act done in a foreign country is a tort and actionable as such in
England, only if it is both
actionable as a tort according to
English law, or in other words is an act which, if done in England,
would be a tort; and
actionable according to the law
of the foreign country where it was done.
71
(2) But a particular issue between
the parties may be governed by the law of the country which, with
respect to that issue, has the
most significant relationship with the
occurrence and the parties."
At pp 1373-8 Dicey and Morris make
it clear that para (2) of the Rule, pointing to what is termed "the
proper law of the tort",
is designed to take account of
exceptiohal and unusual cases. Thus, in contrast to the position in
regard to contracts, there is
no general rule to the effect that the
legal consequences of an alleged tortious act committed in a foreign
country, are governed
by the "proper law" of the tort. On
the contrary, the general rule is that the alleged tort must satisfy
the requirements
of,
inter alia
, English law to be actionable
in England. Thus there is in the case of a foreign maritime lien
based upon a tort no general basis
for an argument that since status
as a maritime lien is one of the legal
72
consequences of the tortious act
an English court. should, when deciding whether to give recognition
to the lien, defer to the proper
law of the tort and ignore its ówn
domestic rules.
Secondly, if substantive right be
the touchstone, it is difficult to understand the rule that
priorities are always governed by the
lex fori
, for the right
attaching to a maritime claim to be ranked in a certain order of
priority by its proper law seems to be just as "substantive"
as the right to be recognized as having the status of a maritime
lien. Certainly a right to a priority seems more substantive than
procedural. This suggests that mere classification as a substantive
right does not necesarily provide the answer. And incidentally
one
can readily see why the English court of admiralty has set its face
against the recognition of foreign priority rules. With maritime
claims emanating from a number of foreign sources, the
73
settling of a
plan of distribution could become a matter of nightmarish complexity
were such recognition to be granted. To a lesser
degree the
recognition of foreign maritime liens, not falling within the
numerus
clausus
of English law, would also pose
problems for an English court, as
I
have to
some extent indicated.
Thirdly the primary object behind
the distinction between substance and procedure and the rule that
procedural matters are governed
by the
lex fori
is to avoid
imposing upon a court foreign legal machinery with which it is
unfamiliar (see Thomas,
Maritime Liens
, at pp 321-2). Thus a
party to litigation in England must take the law of procedure as he
finds it. He cannot by virtue of some rule
in his own (foreign)
country enjoy greater advantages than an English litigant; nor must
he be deprived of any advantages that English
law may confer upon a
litigant
74
in the particular form of action
(see Cheshire and North, op
cit
, p 74). Nevertheless, as Dicey
and Morris point out, the distinction between rules of procedure and
rules of substance is "by
no means clear cut" (op,
cit
,
p 174); in fact Thomas, op
cit
, at p 321, describes it as one
"of notorious difficulty". Cheshire and North, op,
cit
,
at p 77 state
"The truth is that substance
and procedure cannot be relegated to clear-cut categories. There is
no preordained dividing line
between the two, having some kind of
objective existence discoverable by logic. What is procedural, what
is substantive, cannot be
determined in vacuo. A line between the two
must, of course, be drawn, but in deciding where to draw it we must
have regard to the
relativity of legal terms and must realize the
exact purpose for which we are making the distinction."
Later (at p 78) the learned
authors continue -
"'If we admit' says Cook,
'that the "substantive" shades off by imperceptible degrees
into the "procedural",
and that the "line"
75
between them does not "exist",
to be discovered merely by logic and analysis, but is rather to be
drawn so as best to carry
out our purpose, we see that our problem
resolves itself substantially into this: How far can the court of the
forum go in applying
the rules taken from the foreign system of law
without unduly hindering or inconveniencing itself?' "
(The reference is to Cook
Logical
and Legal Bases of the Conflicts of Laws
, p 166.) The differing
views expressed in the House of Lords, in the case of
Boys v
Chaplin
[1971] AC 356
, as to whether the right to claim damages
for pain and suffering sustained by reason of a tortious act was a
substantive or procedural
issue, are illustrative of these
difficulties. And the general approach of the English courts is
exemplified by the decision that
in maritime matters priorities are
governed by the
lex
fori
. In short, it would seem that
considerations of legal policy may enter into the decision as to what
is
76
substance and what procedure
It is against this background that
the decision of the majority in
The Halcyon Isle
,
supra
,
to classify a maritime lien as appertaining to remedies and procedure
(rather than substance) must be viewed. In earlier English
cases,
notably
The Ripon City
,
supra
,
The Two Ellens
(1872) LR 4 (PC) 161, and
The Tolten
[1946] P 135
(CA), a
maritime lien had undoubtedly been described in language indicating
that it constituted a substantive proprietary right,
a charge upon
the ship, and so on. In none of these cases, however, was the Court
concerned with drawing the distinction between
substance and
procedure (including remedies) in the conflicts sense. In fact some
of the language used is somewhat equivocal from
the point of view of
this distinction. Thus, Scott LJ, in
The Tolten
,
supra
,
at p 145/6, speaks of a maritime lien as consisting in -
77
". the substantive right of
putting
into operation the admiralty
court's executive function of arresting and selling the ship, so as
to give a clear title to the purchaser,
and thereby enforcing
distribution of the proceeds amongst the lien creditors in accordance
with their several priorities...."
This dictum stresses the
procedural (or remedial) nature of the lienee's right. And, as
pointed out in
The Tervaete
,
supra
, at p 274, a
maritime lien is -
"...not a right to take
possession or hold possession of the ship. It is confined to a right
to take proceedings in a Court of
law to have the ship seized, and,
if necessary,
sold The right of maritime lien
appears,
therefore, to be essentially
different from
a right of property by hypothec or
pledge "
(per Atkin LJ).
Taking all these factors into
account - the unique nature of a maritime lien and of the rights
which it confers (as elaborated in
this judgment), the difficulty of
distinguishing substance and procedure
78
in conflicts
cases, the object underlying this distinction, the general approach
of the English courts to the application of this
distinction in
practice and the general policy considerations to which
I
have
alluded earlier in this judgment
-I
am not
persuaded
that the majority in
The
Halcyon Isle
,
supra,
erred in
principle
in holding that a maritime lien should be classified as a matter of
procedure rather than substance. It is no doubt a borderline
situation -hence the controversy surrounding the issue - but
I
incline tó the view that the rights arising
from a maritime lien are more closely allied to remedies and
procedures than substantive
rights. As appears from the concluding
passage of their judgment (at p 250 D), which is quoted above, the
minority relied upon the
analogy of a mortgage and held that a
maritime lien validly conferred by the
lex
loci
was as much part of the claim as
was a mortgage similarly valid by the
lex
79
loci
.
This was critically considered by Marais J at pp 812 D - 813 E of the
reported judgment.
I
agree, with respect,
with the views of Marais J on this aspect of the matter and with his
conclusion that the analogy is unsound.
The other ground mentioned by Lord
Diplock for the conclusion that the issue as to the recognition of a
foreign maritime lien should
be determined in accordance with the
domestic rules of the
lex fori
was that -
"...any question as to who is
entitled to bring a particular kind of proceeding in an English
court.... is a question of jurisdiction."
This statement is regarded by
Dicey and Morris as
obiter
and they state that
it cannot be supported and
must be confined to the special
context of maritime
liens (op
cit
,
p 177, note 31).
I
do not find it
necessary to express a view on
this point.
80
Appellants' counsel also
criticized Lord Diplock's finding (quoted above) that the English
authorities supported the principle that,
in the application of
English rules of conflict of laws, maritime claims are classified as
giving rise to maritime liens which are
enforceable in actions in
rem
in English courts where and only where the events on which the
claim is founded would have given rise to a maritime lien in English
law, if those events had occurred within the territorial jurisdiction
of the English court. Counsel submitted that the cases relied
upon
provided scant support for the principle.
This aspect of
the matter was very fully
canvassed in the
judgment of the Court a
quo
and
I
do
not find
it necessary to cover all the same ground
again.
I
shall simply state my conclusions in
regard
to the various cases referred to.
Lord Diplock stated that
The Milford
(1858) Swabey 362,
The Tagus
[1903]
81
P
44
,
The Zigurds
[1932] P 113
and
The Acrux
[1965] P
391
were all supporting authorities, spanning a
century,
in which the court had applied English rules
as
to the existence and extent of maritime liens and not the differing
rules which would have been
applicable
under the
lex causae
.
I
shall
take these
cases
in turn.
The Milford
(1858)
This was the converse of the
present case: the claim by the master of the Milford, an American
ship, for wages was said by the owners
not to give rise to a maritime
lien by the law of America, the
lex loci contractus
, and
therefore not to entitle the master to arrest the freight in an
action in
rem
, whereas the master claimed that by the
lex
fori
(including the Merchant Shipping Act of 1854) he did have
such a maritime lien. In the High Court of Admiralty Dr Lushington
held
for the master. In rejecting the
82
contention based upon the
lex
loci contractus
, he said,
inter alia
, that it was "a
question of remedy, not of contract at all" and that the remedy
must be according to the law of the
forum
in which it is
sought" (p 366). Earlier in his judgment Dr Lushington had
emphasized the inconveniences which might ensue if
the Court was "to
be governed by the
lex loci contractus
" (p 365).
In the next year Dr Lushington
followed this decision in
The Jonathan Goodhue
(1859) Swabey
524.
The Tagus
(1903)
This was also, in a sense, a
converse case. The master of the
Tagus
an Argentinian vessel,
claimed in an action in rem,
inter alia
, wages and
disbursements as master in respect of several voyages. On a question
of priority as against an intervening mortgagee of
the vessel it was
contended on behalf of the mortgagee that by the
lex loci
contractus
, the law of Argentina, the master had a "privileged
debt", in
83 priority to the mortgagee, only
for the last voyage of the vessel. Phillmore J, following
The
Milford
,
supra
,
held that the
lex fori
,
and not the
lex loci contractus
,
applied and that the master had a maritime lien, "as good a
maritime lien as the master of an English ship", for his wages
and disbursements.
The Zigurds
(1932)
This case dealt with priorities in
regard to a fund resulting from the sale of
The Zigurds
and
certain freight. Competing claimants included a German necessaries
man (a company) which had supplied bunker coals to
The Zigurds
in Germany, English necessaries men and an English mortgagee. It was
contended on behalf of the German necessaries man that by German
law,
which was the
lex loci contractus
, its claim gave it the
status of a "ship's creditor", whioh entitled it to
priority over mortgagees and gave it the right
to follow its claim
against subsequent owners;
84
that the claim enjoyed the status
of a maritime lien; and that accordingly it should be given priority
over the English necessaries
men and mortgagee. The Court rejected
the contention. The Court expressed doubts as to the correctness of
the claimant's assertions
as to the legal consequences attaching to
its claim by German law, but relied mainly on the rule that
priorities are determined in
accordance.with the
lex fori
only.
The Acrux
(1965)
The
Acrux
, an Italian
vessel, was sold under an order of the English court of admiralty.
The plaintiff, an Italian corporation providing social
insurance
benefits to seamen employed on Italian vessels, brought an action
in
rem
in an English Court claiming insurance contributions owed by
the owner of the
Acrux
. The plaintiff claimed that by Italian
law it enjoyed the eguivalent of a maritime lien in respect
85.
of its claim. One of the grounds
upon which it was claimed that the English Court had jurisdiction was
the status which the claim
had under Italian law as a maritime lien.
Hewson J, after extehsive reference to what had been stated by Scott
LJ in
The Tolten
,
supra
, held (in effect) that the
court had jurisdiction to entertain an action in
rem
for the
enforcement of any maritime lien if the case was one in which,
according to English law, a maritime lien existed; that the
court
could not recognize as a maritime lien a claim for unpaid insurance,
even though such a lien might exist in Italian law; and
thatin the
circumstances the Court had no jurisdiction to entertain the claim.
I
think that
these four decisions do, as Lord
Diplock
asserted, support the view that English courts apply English domestic
rules to determine the existence and extent of maritime
liens and do
not refer to the
86
domestic rules
of the
lex causae
or, perhaps more correctly, the
lex loci
contractus
or the proper law of
contract. The criticism of the
The
Milford
and
The
Tagus
decisions voiced by Marais J in
the reported judgment (at p 816 C-F) does not detract from this
proposition. Appellants' counsel
did not dispute that these two cases
supported Lord Diplock's proposition: they merely argued that the
cases were wrongly decided.
As regards
The
Zigurds
,
supra
,
the contention was that it took the matter no further.
I
think
this overlooks the Court's reliance on the rule that priorities are
determined by the
lex fori
(see pp 121-2, 125). As regards
The
Acrux
,
supra
,
counsel's submission that Hewson J merely found that the claim was
not a "wage" within sec 1(1)(o) of the Administration
of
Justice Act and hence not a maritime lien does not, in my view,
correctly reflect the decision.
I
also cannot
agree, with respect, with the
87
comments in the
minority judgment on the relevance of
The
Milford
,
supra
,
and
The Tagus
,
supra
,
(see p 247 E-H). It is true that these decisions dealt with what
I
have called the "converse case", ie
where the claim gives rise to a maritime lien by the
lex
fori
(English law), but the
lex
loci contractus
either denies the claim
the status of a maritime lien or limits its extent as such.
Nevertheless, it seems to me that, if the choice
of law rule in
regard to maritime liens is the
lex loci
approach, then this rule must apply whether or not the
lex
loci
recognizes that the claim gives
rise to a maritime lien. This would mean that in cases such as those
exemplified by
The Milford
,
supra
, and
The Tagus
,
supra
, the
claimant's right to a maritime lien should either be denied, or
limited, as the case may be. But the actual decisions in those
cases
are to the contrary: they can, therefore, only be regarded as
rejecting the
lex loci
approach.
88 The other three cases of
importance referred to in the judgment of the majority were
The
Colorado
,
supra
,
The Tervaete
,
supra
, and
The
Tolten
,
supra
.
Of
The
Colorado
,
supra
,
Thomas, op
cit
,
at p 326, says "(there) can be few judicial pronouncements so
ambiguous and perplexing".
I
must
confess to a similar reaction.
I
have read
carefully what Marais J said about this decision (see reported
judgment at pp 813 F - 819 F) and find myself broadly in
agreement
therewith. Essentially, as
I
see it, the
Court referred to French law in order to determine what rights were
conferred by the French mortgage deed or "hypoth
è
que";
and rejected the argument that the court should apply the rule of
French law that a necessaries man ranked ahead of the
holder of a
hypoth
è
que.
The Court did not decide that an English court should recognize a
foreign maritime lien, accorded by the
lex
loci contractus
, which did not fall
within the
numerus
89
clausus
of English law; nor do
I
think
that the reference to French law to determine the legal effect of a
French hypoth
è
que
can be interpreted as support for the
lex
loci
approach.
The Tervaete
,
supra
,
was, as has been repeatedly pointed out, decided by the same three
Lord Justices who sat in
The Colorado
,
supra
. It dealt
with the question as to whether a maritime lien could arise, by
reason of a collision, where at the time of the collision
the ship in
question belonged to a foreign governmentand was on government
service (the ship having subsequently passed into private
ownership);
or whether this was prevented by the sovereign immunity of the
foreign government. It was held that in such circumstances
no
maritime lien arose. Said Lord Atkin (at p 274) -
"A right which can only be
expressed as a right to take proceedings seems to me
90
to be denied where the right to
take proceedings is denied." Lord Diplock's observation that the
reasoning of all
three judgments
in
The
Tervaete
,
supra
,
is consistent
only with the characterization of
a maritime lien in
English law as involving rights
that are procedural or
remedial only seems, with respect,
to be well founded.
The Tolten
,
supra
,
related to a claim (brought by way of an action in
rem
) for
damage to a wharf in a foreign port when the
Tolten
came into
collision with it. The owners of the vessel, relying on the rule laid
down in
British South Africa Company v Companhia de Mocambique
[1893] AC 602
, contended that the court had no jurisdiction to
adjudicate in an action in
rem
for damage done by a vessel to
property attached to foreign soil. This contention was rejected by
both the court of first instance
and the Court of Appeal. The case is
relevant mainly because of Scott LJ's full examination of the history
and nature of the maritime
91
lien. Scott LJ quoted with
approyal a passage from the 5th edition of Dicey which includes the
statement that the court has jurisdiction
to entertain an action
in
rem
for the enforcement of any maritime lien if the case is one
in which, according to English law, a maritime lien exists (see p
161).
Lord Diplock says of the judgment of Scott LJ (at p 238 G):
"Throughout his judgment in
The Tolten
[1946] P. 135
their Lordships think it clear that
Scott L.J. was treating English law as the onlý proper law to
determine what kind of transaction
or event gave rise to maritime
lien that an English court had jurisdiction to enforce as such."
In his
Maritime Liens
,
published in 1980, prior to the Privy Council decision in
The
Halcyon Isle
, Thomas wrote (at p 321):
"The general approach of
English maritime law is to treat the existence of a maritime lien as
governed by the
lex fori
. In the result the ónly
maritime liens recognised by the Admiralty Court
92
are those which accrue under
English
maritime law The fundamental
premise which underpins the choice
of the
lex fori
as the proper law of maritime liens is the
assertion that a maritime lien is a matter of procedure and not
substantive. A maritime
lien is conceived not as a substantive right
in itself but only as a means by which a substantive right may be
enforced."
In support of these statements are
quoted
The Milford
,
supra
;
The Jonathan Goodhue
,
supra
;
The Tagus
,
supra
;
The Zigurds
,
supra
;
The Tolten
,
supra
; and
The Acrux,
supra
.
It is true that Thomas, op cit, at
p 322, expresses reservations about giving unqualified support to the
continuation of the notion
that a maritime lien is a guestion of a
remedy and not of contract at all, but the above-quoted remarks
confirm the correctness of
the view that these authorities sustain
the
lex fori
approach. In the llth ed of Dicey and Morris,
(see pp 185-6) the
lex fori
approach, as enunciated by the
93
majority in
The Halcyon Isle
,
supra
, appears to be accepted without question. (Cf. however,
Cheshire and North, op
cit
, pp 88-90.)
Lord Diplock also made reference
in his judgment to the case of
The Ioannis Daskalelis
[1974] 1
Ll L Rep 174, a decision of the Canadian Supreme Court and expressed
the view that in this case the judgments in
The Colorado
,
supra
, were "misunderstood" (see p 238 B). In
The
Ioannis Daskalelis
,
supra
, Ritchie J stated (at p 178)
that
The Colorado
,
supra
, was authority -
"... for the contention that
where a right in the nature of a maritime lien exists under a foreign
law which is the proper law
of the contract, the English Courts will
recognize it and will accord it the priority which a right of
that
nature
could be given under English procedure."
If this means,
as
I
think it does, that the foreign
maritime lien will be recognized and given the priority
94
accorded to a
maritime lien, then
I
respectfully agree
that the Canadian Supreme Court read into
The
Colorado
,
supra
,
more than was warranted. The subsequent Canadian decision in
Marlex
Petroleum Inc v The Ship "Har Rai"
4 DLR (4th) 739 (thereafter confirmed on appeal to the Supreme Court
of Canada) acknowledged that (at p 744) -
"There is no question that
the recognition of maritime liens is an important question of policy
in maritime law on which there
have been strong differences of view
among the maritime nations. It is also clear that the test applied in
Canada to the recognition
of a foreign maritime lien differs from
that which now applies in England: see
Bankers Trust Int'l Ltd v
Todd Shipyards Corp
.,
[1981] A C 221
(PC) (
The "Halcyon
Isle"
)."
For the
aforegoing reasons, but not without considerable diffidence and
hesitation,
I
have come to the conclusion
that according to English admiralty law, as it was on 1 November
1983, a foreign maritime lien
95
not falling
within one of the categories of lien recognized by the domestic rules
of English law is not accorded the status of a maritime
lien in an
English
court, either for the purpose of
founding an action in
rem
or the purpose of ranking priorities. This is the principle that
must, therefore, be applied by our courts exercising admiralty
júrisdiction.
Applying that principle to the facts of the
present case, it is
clear that the Court a
quo
acted
correctly in declining
to recognize the
Argentinian "lien" as a maritime lien within the meaning of
the Act, and in particular sec 3(4)(a) thereof.
It follows that the
arrest of the
Andrico Unity
was properly set aside in terms of both applications and that the
appeals must be dismissed with costs. In regard to thé costs
of the appeals,
I
record for the benefit of
the taxing master that this Court sat for two full court days in the
combined hearing of the appeals in
the
Andrico
Unity
matter and
96
the appeal in the
Kalantiao
matter and that in my estimation half that time should be attributed
to the
Andrico Unity
appeals and half to the
Kalantiao
appeal.
The appeals are dismissed with
costs.
M M CORBETT HOEXTER JA)
GROSSKOPF
JA)
MILNE
JA)
NICHOLAS AJA)