clr/1976/1976_1_105.pdf

(1)There has been great delay on the part of the respondents to apply for an order under section 30, in view of the fact that the action was filed on March 10, 1972 and the application for the order was made in September, 1975

(2)in view of other liabilities of the ship owners an order under s.30 would be futile in the sense that it could not benefit the respondents and

(3)the order under s. 30 could not-be made See p. 108post. 105 SUGAR LTD. AND ANOTHER 1976 Febr. 21 THE SHIP "GEORGHIOS C" AND ANOTHER v. MITSUI SUGAR LTD. AND ANOTHER for an unlimited period ("until further order") but for "a time specified". Held, (I) with regard to contention (

1. a)above: It was not necessary for fraud, in the strict sense of the term, to be established; it sufficed that there did exist, on the basis 5 of the affidavits before the trial Judge, adequate evidence as regards the imminent prospects, and declared intention, of the appellants ship owners to have further dealings in relation to the ship in question (issue as to what extent and in what circumstances a creditor, such as the respondents, would be 10 entitled to obtain an order under section 30 left open.) Held (II) with regard to contention (
2. b)above: 1(
3. a)The argument of the appellants about delay in applying misses the essential point that it was only in September, 1975, that the respondents found it necessary, due to the course of 15 events in the meantime, to apply for an order under section 30; we do not think that the Judge should not have granted the order merely because it was applied for quite some time after the admiralty action was filed. 1(
4. b)Jt is for a party who takes a certain procedural step to 20 consider whether he is going to benefit therefrom; the mere fact that it might not have appeared that the respondents would had much to gain from an order under s. 30 is not a sufficient reason for us to interfere with the relevant exercise of the discretion of the Judge. (See The Horlock [1876-77] 2 P.D. 243, 25 250). 1(
5. c)In the light of the clear wording of section 30 and in the light of all relevant considerations in this case, we should vary the order so as to limit its application up to March 31, 1976. Appeal partly allowed. No order as to the costs in the appeal. 30 Cases referred to: Eastern Mediterranean Maritime Ltd. v. Nava Shipping Co. Ltd.

(1975)5 J.S.C. 666; Beneficial Finance Corporation Ltd., v. Price [1965] 1 Lloyd's Rep. 556; Reederei Schulte and Bruns Baltic, Schiffahrts K.G. v. Ismini Shipping Company Limited

(1975)1C.L.R. 433; 106 35 The Horlock [1876-77] 2 P.D. 243 at p. 250; La Blanco and El Argentino [1908] 77 L.J. (P.) 91. 1976 Febr. 21 THE SHIP Appeal. Appeal by defendants against an order of a Judge of the 5 Supreme Court (Malachtos, J.) dated the 25th November, 1975 (Admiralty Action No. 14/72), made under section 30 of the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 1963 (Law 45/63), by virtue of which any dealing with the Cyprus Ship "Georghios C" was prohibited "until further 10 order". GL Talianos, for the appellants. M. Papas with E. Montanios and M. Cleopa(Mrs.) for the respondents. The judgment of the Court was delivered by:15 TRIANTAFYLLIDES, P.: The appellants—who are the defendants in admiralty action No. 14/72—appeal against an order* made by a Judge of this Couit on November 25, 1975, under section 30 of the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 1963 (Law 45/63), by virtue of 20 which any dealing with the Cyprus ship "Georghios C" (defendant 1 in the action) was prohibited "until furthet order". The said order under section 30 was initially applied for ex parte, and was so granted, on September 24, 1975, by another Judge of this Court. 25 The appellants opposed the making of the order and the trial Judge, after hearing counsel for the parties, confirmed it, eventually, on November 25, 1975; during the proceedings before him there were filed affidavits from which it emerged that the ship was already mortgaged to a bank in England, that it had 30 been arrested in India byjudgment creditors who had to receive over 300,000 U.S.A. dollars and that it was about to be sold by public auction in the course of execution set in motion by the said judgment creditors, that appellant 2 was anxious to effect a private sale of the ship to a purchaser who had offered 35 850,000 dollars and that the aforementioned bank was prepared to satisfy the judgment debts on condition that it would receive the said sale price. From affidavits which have been filed, by consent, during the .* Reported in

(1975)11 J.S.C.

1. 107 "GEORGHIOS C" AND ANOTHER v. MITSUI SUGAR LTD. AND ANOTHER 1976 Febr. 21 THE SHIP "GEORGHIOS C " A N D ANOTHER v. MITSUI hearing of this appeal, in order to establish facts which have supervened since the making of the order appealed from, it appears that a memorandum of agreement for the sale of the ship for the amount of 850,000 dollais was signed, the liabilities under thejudgment debts have been satisfied and the mortgage debt to the bank has been paid off, although the mortgage is still registered in the relevant Register in Cyprus. 5 SUGAR L T D . A N D ANOTHER The appeal was argued on two grounds only: First, that the Judge should not have made the order under section 30 because there had not been proved, or even alleged, any fraud on the 10 pait of appellant 2, and, secondly, that the Judge in making the order exercised his relevant discretion wrongly. As it appears from thejudgment of the learned Judge counsel foi the appellants did concede, in effect, that the expression "any interested person" in section 30 of Law 45/63 may be taken to 15 include a person, such as a creditor, who does not have a proprietary or other beneficial interest in the ship concerned. The said section 30 reads as follows :"The High Court"—now the Supreme Coutt—"may, if the Court thinks fit (without prejudice to the exercise of any 20 other power of the Court), on the application of any interested peison make an order prohibiting for a time specified any dealing with a ship or any share therein, and the Court may make the order on any terms or conditions the Court may think just, or may refuse to make the order, 25 or may discharge the order when made, with oi without costs, and generally may act in the case as the justice of the case requires; and the Registrai, without being made a party to the proceedings, shall on being served with an official copy thereof obey the same". 30 It is, in all material respects, identical with section 30 of the Merchant Shipping Act, 1894, in England. As it appears (at p. 23) from a book on the Merchant Shipping Acts, by Porges and Thomas (vol. 11 in the series "British Shipping Laws") there is not, really, much case-law in England 35 in relation to the application there of section 30of the Meichant Shipping Act,
2. In Cyprus this matter was considered (by the same Judge who has made the appealed from ordei) in the case of Eastern Mediterranean Maritime Ltd. v. Nava Shipping Co. Ltd.

(1975)40 108 5 J.S.C. 666; theie, after reference to, inter alia, the Australian case of Beneficial Finance Corporation Ltd., v. Price, [1965] 1 Lloyd's Rep. 556, the conclusion was reached that, in its application, section 30 of Law 45/63 should be given a liberal inter5 pretation so as to "cover all cases where a person is geneially interested"; but, in the Nava case,supra,there were stated, also, the following (at p. 677), on the strength of a dictum of Moffitt J. in the Beneficial case (at p. 561):- 10 15 "The procedure under section 30 of the 1894 Act, as stated by Mr. Justice Moffitt, in the case of Beneficial Finance Corporation Ltd., supra,at page 561,'isprimafacie intended to be summary, the order being temporary in nature, no doubt taking into account the probable rights of the parties to adjust their permanent rights by other procedures. The foundation of the order is to protect dealings for a specific time but leaving the Couit to impose conditions which primafacie protect the person whose dealings are prohibited and confine the effect of the order so it will not put the applicant in an overadvantageous position'". 20 The matter of the application of section 30 of Law 45/63 was, also, dealt with later in the case of Reederei Schulte and Bruns Baltic, Schiffahrts K.G., v. Ismini Shipping Company Limited,

(1975)1C.L.R.

1. Thejudgment in the above case is the subject matter of Civil Appeal No. 5535, which was 25 filed on January 3, 1976, and has not been heard yet. We do not intend, in the present case, to go extensively into the problem of the exact ambit of section 30, especially as this matter was not argued before us for the purposes of this appeal; as our case-law is, in this respect, still in the process of develo30 ping, we leave entirely open the issue of to what extent and in what circumstances a creditor, such as the respondents in the present case, would be entitled to obtain an order under section
2. As regards the first ground of appeal, namely that fraud on 35 the part of the appellants shipowners ought to have been alleged and established before an order undei section 30could be made, we think that this contention was rightly rejected by the trial Judge. It was not necessary for fraud, in the strict sense of the term, to be established; it sufficed that there did exist, on 40 the basis of the affidavits before the trial Judge, adequate evidence as regards the imminent prospect, and declared intention, 109 1976 Febr. 21 THE SHIP "GEORGHIOS C" AND ANOTHER v. MITSUI SUGAR LTD. AND ANOTHER of the appellants shipowners to have further dealings in relation to the ship in question. 1976 Febr. 21 THE SHIP "GEORGHIOS C" A N D ANOTHER v. MITSUI SUGAR L T D . As regards the second ground of appeal various reasons were put forward, by counsel for the appellants, as to why the discretion of the trial Judge was, allegedly, wrongly exercised. We shall deal with only those of them which, in our view, merit specific reference in this judgment: 5 A N D ANOTHER It has been argued that there has been great delay on the part of the lespondents to apply for an order under section 30, in view of the fact that the action was filed on March 10, 1972, 10 the pleadings were closed on July 19, 1975, and an application for the order was not made until September 24,
3. This argument of the appellants misses the essential point that it was only in September, 1975,that the respondents found it necessaiy, due to the course of events in the meantime, to apply for an 15 order under section 30; so, we do not think that the Judge should not have granted an order under this section merely because it was applied foi quite some time after the admiralty action concerned was filed. Another argument which has been advanced by counsel for 20 the appellants isthat, inview of other liabilities of the appellants shipowners, and especially as the ship concerned was mortgaged and was, also, the subject of execution in India in respect of judgment debts exceeding 300,000 dollars, an order under section 30 would be futile, in the sense that it could not benefit 25 the respondents, as plaintiffs. It is for a party who takes a certain procedural step to consider whether he is going to benefit therefrom; and the mere fact that it might not have appeared that the respondents would had much to gain from an order under section 30 is not, in 30 our opinion, a sufficient reason for us to interfeie with the relevant exercise of the discretion of the Judge who granted such order in the present case. Apparently, the respondents felt that, notwithstanding the said mortgages and judgment debts, it was necessary, in order 35 to protect their rights, toprevent any further dealings in relation to the ship in question. Useful reference may be made, in this connection, to a case which was decided before the enactment of the Merchant 110 5 Shipping Act, 1894; it is the case of The Horlock, [1876-77] 2 P.D.243, 250; there in an action arising out of co-ownership of a ship an order was made, similar to an order that can be now made under our section 30, even though the ship was already burdened by two mortgages; and it was stated that:- 10 " unless the defendant was restrained from creating any further charge on the said shares, the said shares would not be of sufficient value to satisfy the plaintiff's claim for the earnings of the vessel from 1874 to the time of the making of the affidavit, and the costs of the action." It has been complained of by counsel for the appellants that, in the case now before us, the order under section 30was made for an unlimited period ("until further order") and that in section 30 it is expressly provided that an order under it should 15 be made for "a time specified". It is correct that it appears from the case of La Blanca and El Argentino, [1908] 77 L.J. (P.) 91,that an order, under section 30 of the Merchant Shipping Act, 1894, in England, was made until further order, but this was done, as shown by the report 20 of that case, at only an early ex parte stage of the proceedings. We are of the view, in the light of the clear wording of section 30, and in the light of all relevant considerations in this case, that we should vary the order which was finally made by the trial Judge, so as to limit its application up to March 31, 1976; 25 and, in the meantime, the respondents can take all other necessary steps for the protection of their interests, including expeditingthetrialof theaction. Ofcourse,thereisnothing to prevent the discharge of the order earlier if the parties come to an agreement as regards the provision of security for the claim in 30 the action and its costs; and, also, a further order under section 30may always be applied for in the light of the situation existing at the time when the application for it is to be made. In the circumstances, this appeal is allowed paitly, to the extent to which the order under section 30 has been varied as 35 above; but, we have decided that there should be no order as to the costs in the appeal. Appeal partly allowed. No order as to costs in the appeal. 111 1976 Febr. 21 T H E SHIP "GEORGHIOS C " A N D ANOTHER v. MITSUI SUGAR LTD. A N D ANOTHER