clr/1976/1976_1_22.pdf

(1)the first contention cannot stand because "seaman" in rule 185 of the Cyprus Admiralty Jurisdiction Order, 1893 does not include a "master" (see Karamailis (No. 2) v. Pasparo Shipping Co. Ltd.

(1972)1C.L.R. 72).

(2)It is clear that the counterclaim arises out of the same transaction as the claim and is not in respect of a matter wholly distinct from and independent of that upon'which the claim is based. In substance the counterclaim is the defence of the defendant to the plaintiff's claim. The matters set out in the counterclaim are so closely connected with the plaintiff's claim that in substance they are really the defence to the action.

(3)Under the circumstances it does not seem to me just or fair that the defendant should be ordered to give security for costs, and, therefore, the application is dismissed. (See Mapleson v. Masini [1879-80] 5 Q.B.D. 144, Neck v. Taylor [1893] 1 Q.B.D. 560 and p. 27 et seq. of the judgment post). 35 Application dismissed with costs. Cases referred to: Karamailis (No. 2) v. Pasparo Shipping Co. Ltd.

(1972)1 C.L.R. 72; 23 1976 Jan. 31 ESTA SHIPPING Co. LTD. v, NlKIFOROS A. M. LASKOS 1976 Jan. 31 ESTA SHIPPING Co. LTD. Maplesonv. Masini[1879-80] 5 Q.B.D. 144; Neck v. Taylor[1893] 1Q.B.D. 560; New Fenix Compagnie Anonyme D' Assurances De Madrid v. General Accident, Fire, and Life Assurance Corp. Ltd. [1911] 2 K.B. 619. 5 V. NlKIFOROS A. M. LASKOS Application. Application by the plaintiff undei rules 185 and 203 of the Cyprus Admiralty Jurisdiction Order, 1893, for an order of the Court ordering the defendant to give security for costs for the sum of £500.-in view of the counterclaim adduced by defendant 10 in an admiralty action whereby plaintiff claimed, inter alia, an order of the Court ordering the defendant to deliver to the plaintiff the ship "Barbara S". E. Letnonaris, for the applicant. G. Mitsides, for the respondent. 15 The following judgment was delivered by:MALACHTOS, J.: The plaintiff company in this Admhalty Action is the registered owner of the ship "Barbara S" which is registered in Cyprus and flies the Cyprus flag. The said ship was transferred into the name of the plaintiff company on 20 9/5/74 from her previous owner, namely, Harmony Ltd., which is also a company formed and incorporated in Cyprus and has its registered office in Nicosia. 3y a contract of employment dated 12/5/73 between the defendant and Harmony Ltd. through its managing director 25 George Spanopoullos, who is also the managing director of the plaintiff company, the defendant was appointed as the captain of the ship "Barbara S*\ which was at the time at the poit of Las Palmas, and on instructions he navigated her and brought her to the port of Naples in Italy, where she has been stranded 30 ever since. On 24/6/75 the plaintiff company filed the present action against the defendant claiming (

1. a)an ordei of the Court ordering the defendant to deliver forthwith to the plaintiff companythe ship"Barbara S" 35 which flies the Cyprus flag and is the property of the said company and is at the port of Naples in Italy; (
2. b)damages for unlawful detention of the said ship as from 1/9/73; 24 (
3. c)further or any other remedy; and 1976 Jan.31 (
4. d)legal interest and costs. ESTA At the same time by an ex parte application the plaintiff company applied for an order of the Court ordering the defen5 dant to delivei forthwith to the plaintiff the ship "Barbara S". This application which by order of the Court was served on ,the defendant was opposed and was bitterly contested by him. In view of the fact that the evidence which was given at the hearing of the application was substantially the same that was 10 to be given at the tiial of the action itself, both advocates, in order to save time and costs, agreed to the withdrawal of the application with costs in cause and fight the case on its merits. 15 20 25 30 35 The plaintiff company filed its petition on 25/10/75 and on 6th November, 1975,the defendant filed his answer and adduced also a counterclaim where he alleges that by written agreement signed on or about 12/5/73,the defendant was appointed master of "Barbara S" by the then ship owners Harmony Ltd. His basic remuneration was agreed at £370.- per month. On oi about 13/7/73 when the ship was in the port of Naples having arrived there on or about 20/6/73,for the purpose of discharging cargo and carrying out repairs many wariants for.the anest of the vessel were issued by the Italian Couits because of the ship owners liability.to Italian and othei creditors. At no time from the date of the first warrant i.e. 13/7/73,until 6/11/75, was there a period during which the ship was free from any such warrants making it thus possible for her to leave Naples. By virtue of these orders the defendant became custodian of the ship and could not be removed or replaced or resign without the leave of the Italian Courts. He also alleges, that he is entitled to receive his salary as master of the said ship and that he is lawfully in possession of the ship as the master and/or custodian and/or as exercising possessory lien. Furthermore, it is his allegation that Harmony Ltd. caused registration of the ship in question into the name of the plaintiff in order to defraud its creditois. In fact, the main shareholder in both companies and managing director is the same person, namely, George Spanopoullos. The defendant in his counterclaim prays - 40 (
5. a)for a declaration of the Court that the purchase and/or transfer to the plaintiff by Harmony Ltd. of the vessel 25 SHIPPING Co.LTD. """*' v. NlKIFOROS A. M. LASKOS 1976 Jan. 31 "Barbara S" was invalid and/or null and void and of no effect; ESTA (
6. b)for an order setting aside such transfer as having been made fraudulently; SHIPPING Co. LTD. v. NlKIFOROS A. M. LASKOS (
7. c)the sum of C£10,180.- for wages and disbursements; and 5 (
8. d)interests and costs. In view of the counterclaim adduced by the defendant the plaintiff on 28/11/75 filed the present application undd rules 185 and 203 of the Cyprus Admiralty Jurisdiction Order 1893, 10 claiming an order of the Court ordering the defendant to give security for costs foi the sum of £500. This application was opposed by the defendant. Rule 185 reads as follows: "If any plaintiff (other than a seaman suing for his wages 15 — or for the loss of his clothes and effects in a collision) or any defendant making a counterclaim is not resident in Cyprus, the Court or Judge may, on the application of the adverse party, order him to give such security for the costs of such adverse party as to the Court or Judge shall 20 seem fit; and may order that all proceedings in the action be stayed until such security be given". Counsel for the applicant company submitted that since it is not in dispute that the counterclaiming defendant is not a resident of Cyprus the Court may exercise its discretion and 25 order him to give security for costs. On the other hand, counsel for the respondent argued that the defendant being the master of the ship in question should be considered as a seaman and, therefore, is exempted from the provisions of rule 185. I must say straight away that this contention of counsel for 30 the defendant cannot stand in view of the decision in the case of Pantelis Karamailis (No. 2) v. Pasparo Shipping Co. Ltd.

(1972)1C.L.R. 72 where it was held by the Full Bench of this Court that "seaman" in rule 185 of the Cyprus Admiralty Jurisdiction Order 1893 does not include a "master". 35 The other argument of counsel for the defendant is that the position of a counterclaiming defendant, residing abroad is not always the same as that of an ordinary plaintiff. He submitted 26 hat when the counterclaim is in substance the defence of the defendant, then, as a rule, the Court exercises its discretion in favour of such defendant and no order for security for costs is made. 5 In the case of Mapleson v. Masini [1879-80] 5 Q.B.D. 144, whichwas anaction for breach ofcontract against the defendant, a foreigner residing abroad, he, by his defence, denied the breaches, and also made a counterclaim for breaches of the same contract by the plaintiff, claiming damages to an amount 10 less than the plaintiff's claim, it was held that the defendant could not be ordered to give a security for the plaintiff's costs occasioned by the counterclaim. Also in the case of Neck v. Taylor [1893] 1Q.B.D. 560, which was a case where a defendant resident out of the jurisdiction 15 set up a counterclaim which arose out of the same transaction as the claim, and was in substance, though not technically in the nature of a defence to the action, it was held that the Court had a discretion to refuse to order the defendant to give security for the costs of the counterclaim. The facts in that case were 20 as follows: 25 30 35 40 "The action was brought by the plaintiff, a boarding-house keeper, for the sum of £69, the balance of an account for board and lodging supplied to the defendant, after giving credit for payments made. The defendant in her statement of defence denied that she.was indebted as alleged in the claim; and counteTclaimed in respect of the wrongful detention of certain jewellery. She alleged in the counterclaim that the plaintiff by force and threats induced and constrained her to part with a diamond ring, and wrongfully refused to deliver to her and'retained certain other jewellery, which she had deposited with the plaintiff for safe custody; and she claimed a return of the ring and other jewellery or £250.- damages. Particulars of the counterclaim had been delivered, which stated that the plaintiff refused to allow the defendant to leave the boarding-house until she had handed over a diamond ring to the plaintiff; that the plaintiff represented to the defendant that by the law of England the defendant must remain in the house till she paid plaintiff's demand; that the defendant, constrained by such threats and acting on the plaintiff's representations, parted with the diamond ring as aforesaid, in order to obtain liberty to leave the house; 27 1976 Jan. 31 ESTA SHIPPING Co. LTD. v. NlKIFOROS .. M. LASKOS 1976 Jan. 31 ESTA SHIPPING Co. LTD. v. NlKIFOROS A. M. LASKOS and that the plaintiff, in whose custody the rest of the jewellery was deposited, refused to deliver the same on the defendant's demand, and compelled the defendant to depart without delivery of the same, and still withheld the same. Thedefendant wasa foreigner and wasresident out 5 of the jurisdiction. It appeared from the affidavits, that the plaintiff had given the defendant a receipt for the jewellery, stating it to be deposited as a security for the sum of £69 owing to the plaintiff. The plaintiff applied at chambers for an order that the defendant should give 10 security for the costs of the counterclaim, and the master grantedtheapplication. TheJudgeatchambers,onappeal, affirmed the decision of the master. But the Divisional Court, on appeal, reversed his decision, and set aside the order for security for costs." 15 At page 562 Lord Esher, M.R. had this to say: "The rule laid down by the cases seems to be as follows: Where the counterclaim is put forward in respect of a matter wholly distinct from the claim, and the person putting it forward isa foreignei resident out of thejurisdic- 20 tion, the casemaybetreated asif that person wereaplaintiff, and only a plaintiff, and an order for security for costsmay bemade accordingly, in the absence of anything to the contrary. Where, however, the counterclaim is not in respect of a wholly distinct matter, but arises in respect 25 of the same matter or transaction upon which the claim is founded, the Court will not, merely because the party counterclaiming is resident out of the jurisdiction, order security for costs; it will in that case consider whether the counterclaim is not in substance put forward as a defence 30 to the claim, whatever foim in point of strict law and of pleading it may take, and, if so, what under all the circumstances will be just and fair as between the paities; and will act accoidingly. Therefore, the Court in that case will have a discretion." 35 This case was cited with approval in the case of New Fenix CompagnieAnonymeD'AssuranceDeMadridv.GeneralAccident Fire andLife Assurance Corp. Ltd. [1911] 2 K.B.D. 619 where it was held that "There is no hard and fast rule of practice which prevents the Court from making an order for security 40 for costs against a person resident out of thejurisdiction who, upon being sued in this country, sets up a cross-claim, either 28 5 by counterclaim or by cross-action. It is for the Couit to consider, in the exercise of its discretion, whether, having regard to the circumstances of the particular case, the crossclaim must be treated as made, substantially, by way of defence to the action against the claimant, or whether it must be regarded as being in the nature of an independent claim made in respect of matters foreign to that action, and therefore one with regard to which security for costs ought to be ordered to be given". 10 In the present case it is clear that the counterclaim arises out of the same transaction as the claim and is not in respect of a matter wholly distinct from and independent of that upon which the claim isbased. In substance the counterclaim isthe defence of the defendant to the plaintiff's claim. The matters set out 15 in the counterclaim are so closely connected with the plaintiff's claim that in substance they are really the defence to the action. 20 Under these circumstances, it does not seem to me just or fair that the defendant should be ordered to give security for costs, and, therefore, the application of the plaintiff is dismissed with costs. Application dismissed with costs. 29 1976 Jan. 31 ESTA SHIPPING Co. LTD. V. NlKIFOROS A. M. LASKOS