clr/1980/1980_1_69.pdf

(1980)to produce certain documents that were attached as exhibits to his aforementioned affidavit of September 28, 1976 which had been held inadmissible. Upon an objection by the respondents to the production of these documents the Court ruled that the documents in question were inadmissible on theground thatthey had already been rejected by a previous ruling of the Court. In the end the Court discharged the order of arrest as made on insufficient grounds. Upon appeal by plaintiffs the sole issue for consideration was whether the trial Judge rightly excluded the documents which were sought to be produced by Mr. Lestos whilst giving oral evidence. 5 10 Held, that the documents which were excluded as being inad­ missible, appear to be prima facie admissible; that they should not have been rejected because at anearlier stage of theproceed- 15 ings they had been treated as being inadmissible when it was sought tohave themproducedin anotherway;andthatinasmuch as the said documents might have influenced or affected favour­ ably the decision of the trial Judge regarding thecredibility of Mr. Lestos, had they been accepted in evidence, the order, 20 subject-matter of this appeal should be set aside; and that, accordingly, the appeal must be allowed. Appeal allowed. Appeal. Appeal by plaintiffs against the order* of a Judge of the 25 Supreme Court of Cyprus (Malachtos, J.) dated the 29th October, 1976 (Admiralty Action No. 83/76) whereby an order of arrest of the defendant cargo, which was made on the 9th June, 1976, was discharged. L. Papaphilippou,for the appellants-plaintiffs. 30 C. Erotocritou, for the respondent-defendant. Cur. adv. vult. TRIANTAFYLLIDES P.: The judgment of the Court will be delivered by Mr. Justice Hadjianastassiou. HADJIANASTASSIOU J.: In this appeal the main question raised is whether the learned trial Judge rightly excluded the documents produced by Captain Lestos during his evidence before the trial Court. The facts, as shortly as possible, are * Reported in

(1976)1 C.L.R. 350. 70 35 1 C.L.R. GradeOneShippingγ.Cargoon Ship"CriosΙΓ' Hadjianastassiou J. these: On June 9, 1976, the plaintiffs, by a writ of summons, claimed (

1. a)a declaration of the Court that the plaintiffs are entitled to a lien on the cargo on board the ship " CRIOS II " inrespect offreights, demurrages,for lossof earnings andemplo5 yment of the ship and otherexpenses; (b)an order of theCourt enforcing the plaintiffs' lien against the cargo on the ship " CRIOS II" by selling the cargo by public auction or private agreement; and (
2. c)judgment for the equivalent of U.S. 286,095.79for freight, demurrages and or damages and expenses 10 in virtue of a Charterparty dated 26th November, 1975 and/or the same amount for breach of the terms and conditions of the said Charterparty and/or for fraud and/or misrepresentations and/or deceit and/or otherwise. On the same date, the plaintiffs applied (
3. a)for an order for 15 the issue of a warrant of arrest of the cargo laden on board the ship " CRIOS II" and lying in Larnaca port; and (
4. b)an order of the Courtappointing Messrs. Francoudi &StephanouLtd., upon arrest of the cargo, to discharge the same from the ship " CRIOS I I " and place it in a safe place or warehouse under 20 the supervision and custody of the Marshal until further order of the Court. In support of this application, an affidavit was sworn by a certain Jean Diakakis of Piraeus, who stated that the plaintiffs were a private company of limited liability registered in Cyprus 25 under the Companies Law, Cap. 113and the owners of the ship " CRIOSII" which was registered in Cyprus underthe Cyprus flag. He further stated that on November 26, 1975, the plain­ tiffs, as owners of the ship " CRIOS I I " ,and a certain Italian firm known as Intermediterranean S.R.L. of Genova, entered 30 into a voyage charter for the carriage of general cargo from Venice and Rijeka to Jeddah of Saudi Arabia for a lump-sum freight of U.S. 280,000payable within 5working days from the signing of Bills of Lading at each port by payment in owner's favour to Banca of Switzerland Geneva. It appears further 35 that the demurrage was agreed at loading, at U.S. 2.250 per day. By anaddendum attachedto exhibit A, theparties had agreed (
5. a)that the loading ports of Venice and Rijeka be changed to Marina di Carrara and Pozzuoli, and for this deviation, the 40 charterers agreed to pay to the plaintiffs, together with the 71 Hadjianastassiou J. GradeOne Shippingv. Cargoon Ship"CriosΠ"

(1980)freight, U.S. 280,000 and an additional amount of U.S. 5,000; (

1. b)that in addition to the loading ports referred to earlier, the ship " CRIOSI I "was to call also to a third loading port of Rijeka and to a second discharging port, i.e. Jeddah of Saudi Arabia and Hodeidahof Yemen. Inview of this change, 5 the said charterers agreed to pay to the plaintiffs together with the freight, an additional amount of U.S. 50,000 plus the full amount of the disbursement, accounts at Rijeka and Hodeiddh. In paragraph 9 the affiant stated that in compliance with the 10 charterparty the said ship loaded the cargo according to the instructions of the said charterers from Marina di Carrara Pozzuoli and Rijeka and has completed her voyage. She firstcalled at Jeddah port where she registered her turn for ber­ thing and thereafter went to Hodeidahwhere she discharged the 15 cargo. Then she proceeded to Jeddah where she was waiting to berth and to obtain thepayment of thefreight and/or hiring, demurrages and expenses. However, in spite of the repeated demands by telexes and telephone calls, the charterers failed and/or refused to pay. The ship while on the roads had 20 an accident by which she was damaged and as her turnto berth would delay for a few months, she sought the nearest safe port to unload her cargo and exercise lien on the cargo for unpaid freights and hiring and other amounts payable underthe charterparty. Cyprus was considered the nearest and safest 25 port. On June 9, 1976, the learned trial Judge, having considered the ex-parte application, and the affidavit in support, as well as the other material before him,was satisfied that it was a proper case for the issue of the warrant of arrest of the cargo in ques- 30 tion. Furthermore, the shipowning company was ordered to filea security bond in the sum of £7,000.—to be answerable in damages to the charterers or owners of the cargo in question, and theapplication wasfixedon July 1, 1976, for the other side to show cause why the order should not be made final. On 35 July 1, 1976, counsel having disputed the claim and the order for the arrest of the cargo, applied for an adjournment tofile an application to set aside that order On July 21, 1976, counsel for the defendants, applied for an order cancelling the order made on June 9, 1976, for the arrest 40 72 1 C.L.R. GradeOneShippingv.CargoonShip"CrlosΠ" Hadjianastassiou J. of thecargo in questionand/orvarying thesaid orderby exclu­ ding therefrom the cargo described in para. 'B', and/or by increasing the security supplied by plaintiffs to an amount commensurate to the amount of damages which applicants 5 might suffer. This application was supported by an affidavit sworn by Mr. Fr. Nicolaides,an advocate, who said that the shippers appearing in the attached application duly paid all freights for the carriage of the said cargo and obtained clean Billsof Ladingmarked"freight prepaid"evidencingthecontract 10 ofcarriagebetweentheownersof" CRIOSII" andtheshippers. Thesaid bills of lading were forwarded to theconsignees by the shippers who indorsed same to the ultimate receivers of the cargo after the latter paid full value of the said cargo and the freight; and theproperty in the said cargo did duly pass tothe 15 indorsees who were also the holders of the original Bills of Lading and are the applicants. In paragraph 5 the affiant challenged the affidavit of Mr. Jean Diakakis as containing incorrect and untrue statements, and thatit was misleading; and thatit did notjustify orsupport 20 theissue of an orderfor thearrest of the said cargo because(
2. a)the freight alleged to be due and owing to the plaintiffs, even if correct,which is denied,is dueunderthetermsof thevoyage charter dated November 26, 1975, between the plaintiffs and Intcrmeditcrranea of Genova (the charterers). 25 The charterers were neither the shippers nor the consignees of the cargo, nor the indorsees of the.bills of lading. The shippers took clean bills of lading in which no mention of the voyage charter was made nor they incorporated in any way the terms of the voyage charter, and neither the shippers nor 30 theconsignees northeindorsees of thebillsof lading knew of or could have known of the existence of the said voyagecharter. Upon the issue of the bills of lading, the affiant alleged that a new contract had in fact sprang up between the ship and the consignees upontheterms of thebillsof lading andwhat canbe 35 claimed by the plaintiffs in the present case against cargo and in fact against the cargo owners who are the indorsees of the bills of lading is only what is due underthecontractsshown by the bills of lading and that nothing is due under thecontract shown by thebills of lading, and which are all marked "freight 40 prepaid". 73 Hadjianastassiou J. GradeOneShipping?.CargoonShip"CriosU"

(1980)In addition the affiant stated that no.action in rem Jies*once the plaintiffs knew that no freight isdue to them by the owners of the said cargo, who are obviously persons other than the charterers; and that from thesaid bills oflading no lienwhatsoever on the defendant cargo for any of the claims made by the 5 plaintiffs in the above action existed and/or was preserved by the said bills of lading. The plaintiffs had never at any-stage claimed any amount for freight and/or- otherwise from the consignees and/or indorseesof thebills of lading. Even on the plaintiffs' own allegations contained in the affidavit of Jean<\Q Diakakis, the bills of lading marked "freight prepaid" were issued by the master in respect of the cargo in question whilst the plaintiffs' claims-as clearly appear in the said affidavit, are solely against the charterers inaccordance with the terms of the voyage charter. 15 On August 17, 1976, counsel for the respondents-plaintiffs opposed the application and maintained that there were facts and legal issues different from the application mentioned by the other side. The trial Court, having fixed the case on September 11, 1976,for hearing, ruled also that the.opposition 20 ought to befiledon or before September 4,

1. On September 14, 1976, the datefixedfor.the hearing of the application to show cause why the order of arrest should be cancelled, Mrs. Psillaki on behalf of the cargo owners, invited the Court to grant leave tofilea supplementary affidavit which ££ was sworn by Mr. Nicolaides on September 1,
2. The affidavit, counsel stated, related solely to facts which came to their knowledge long timeafter thefilingofthe present application. After further argument, Mr. Papaphilippou intervened to 30 inform theCourt that theaffidavit of the 1stSeptember hasnot been sent to them, but in anyevent, hewasraising no objection to the production of that affidavit at any stage of the proceedings, but he wished to take time to seehow this affidavit would affect this case. With that in mind, the Court granted leave to 35 produce that affidavit, and Mrs. Psillaki made also" a statement that she was not objecting to the filing of the supplementary affidavit by the other side dated September 10, 1976, reserving at the same time the'right tofilea supplementary affidavit. Then, the Court madethisruling: "In view of thestatement 40 74 1 C.L.R. GradeOneShippingτ.CargoonShip"CriosII" Hadjianastassiou J. of Mr. Papaphilippou that he would not object to any supple­ mentary affidavits even in the course of this application, Ithink that there will be no difficulty infilingany supplementary affi­ davits" 5 -During the hearing of the application Mr. Papaphilippou asked the Court to give him leave to produce two further affi­ davits, theaffidavit of Mr. Lestos and Mr. Papadopoulos which were sworn andfiledwith the Registrar on September 28, 1976, but Mrs. Psillaki opposed that application because, as she put 10 it, it contained entirely new facts than those relied upon in opposition. It even contained certain new facts from the affi­ davit of Mr. Simos PapadopouIIosdated September 10,
3. The objection of Mrs. Psillaki was sustained by the ruling of the Court dated October 16,
4. And then on October 18, 15 1976, counsel for theapplicants sought to.call Mr. D.Lestos to give evidence; counsel for the other side having objected the trial Court overruled the objection and said that under rule 114 of the Cyprus Admiralty Jurisdiction Order 1893, evidence shall be given either by affidavit or by oral examination or 20 partly in one mode and partly in another. So,the respondents in this application are entitled to call a witness or witnesses. It is anothermatterwhether theevidence tobegiven„by the witness is admissible in evidence or not. With that ruling m mind, Mr. Papaphilippou called Captain 25 Demetrios E. Lestos, who told the Coyrt that he became the Master of the ship "CRIOS I I " as from December 8,
5. That ship was at Elefsina, Greece, and proceeded to Italy to load general cargo and from there to take it to Saudi Arabia. Hearrived at Marina di Carrara in Italy onDecember 15,
6. 30 The loading commenced on December 20, 1975, and was completed on'December 31,
7. When he arrived at Marina di Carrara onFebruary 15, 1975, Mr.Donati of TremarAgency cameonboard andgavehimthenotice of loading and theblank bills of lading of Great Pale Shipping Co. which he took with 35 him from Pireaus. He gave those bills of lading in blank in order to befilledby Tremar, and to bring them back to him for signature. The loading was completed, but he was waiting for the bills.of lading to be filled up'in order to be signed. Mr. Donati returned and brought to him the bills of lading. He 40 refused to accept them because they were,not the-bills of lading 75 Hadjianastassiou J. GradeOneShippingτ.CargoonShip"CriosU "

(1980)which hegaveto him,and Mr. Donati told him that oneof his employees made a mistake infillingup the bills of lading. He kept only of those documents, the master's copy and agent's copy. Theoriginals were takenback by Mr.Donati in orderto replace them with thosehegaveto him. Infact, hesaid exhibit 5 'D' attached to the affidavit of Mr. Diakakis was thengiven to him who acceptedand signed it in his presence. Headdedthat if he saw the Master's copy and the agent's copy of those presentedby Donati,whichherejected hewould recognizethem. He said that they were those attached to his affidavit of 10 September 28,

1. At that stage the witness was asked to produce them. Mrs. Psillaki objected to the production of these documentswhich were exhibits to an affidavit and,there­ fore from evidence which has already been held inadmissible. The Court in dealing with the objection of counsel said: 15 "Objection sustained, the respondent at this stage tries to put in evidence which has already beenrejected by a previous ruling of this Court. That evidence was contained in an affidavit sworn by thewitness onthe28th September, 1976, towhichthe documents in question were attached as exhibits." 20 When the witness continued with his evidence, he conceded that he had signed some original bills of lading at Pozzuoli on board thevessel,both for Marina di Carrara and for Pozzuoli and he had signed also the mate's receipts. In that particular case, he added, the mate's receipts were signed by him and by 25 Mantsini of Navigo inhis presenceboth for Marina diCarrara and for Pozzuoli. Hesigned and affixed the seal of theship as well. Heposted the master copies of thebills of lading aswell as the receipts to the owners in Piraeus. He saw those docu­ mentsagain attheoffice of Mr. PapaphilippouonSeptember 27, 35 when he arrived from Nigeria. There was a further objection by counsel for the other side that in view of the previous ruling of the Court that thedocu­ ments attached to the affidavit of Mr. Lestos dated September 28, 1976, which affidavit was ruled inadmissible as evidence, 35 the documents attached to that affidavit can not be put in evidence in another way. The Court, having heard further argument on this issue, reached this decision:- "The objection is sustained. The documents which are objected to be put in evidence are documents attached to the affidavit of the witness 40 and which affidavit was, by theruling of this Court,on the 16th 76 1 C.L.R. GradeOneShippingv. CargoonShip"CriosΠ" Hadjlanastasslon J. October, 1976, ruled as unacceptable in evidence. Further­ more, what transpired between the witness and Tremar is considered as res inter alios acta, and as such irrelevant to the issue in the present application. What transpired between the 5 witness, themaster of the ship andTremar,cannotbeadmitted in evidence as binding theconsignees and owners of the cargo." Finally, CaptainLestos said that he left Puzzuoli on the 16th January, 1976, and that there was on board freight payable at .destination which was covered by bills issued by him,Nos. 15 10 and
2. Henotified theconsignees of the goods covered by those bills onarrival for payment of thefreight but they did not pay. All the other bills of lading signed by him, the freight was "freight pre-paid", but whichwas notpaid. In explaining this position, he said that that is why he gave theletters to Tremar 15 .andNavigo,exhibitsC & Dattachedtotheaffidavit of Diakakis. Finally, on October 29, 1976, the learned Judge, having considered all the material put before him and the evidence of Captain Lestos (Master of "CRIOS I I " ) , said:20 25 30 35 40 " Imust say from nowthatfor thepurposes of thisapplication, I discard the evidence of this witness, which is in direct contradiction with thefacts containedin the affidavit of Jean Diakakis of 9.6.76 and the documents attached thereto, on which the Order for arrest of the cargo was granted. What strikes me peculiar in this case is the fact alleged by the witness that he did not have the master's copy of the bills of lading signed by him when he arrived at Larnaca port for the unloading of the cargo and he delivered to Frangoudhi and Stephanou a set of bills of lading which were issued by Tremar. This strengthensthe allegation of theapplicantsthatthestory told-by thewitness as regards theissue of bills of lading at Marinadi Carrara is an afterthought. Furthermore, it is also peculiar the fact that although the plaintiffs must have had knowledge of the fraud committed by the charterers since January, 1976, as it appears from the letter of the charterers dated 16.1.1976, yet, thereis no evidence that they took any steps to secure their claim or to notify either the shippers or the consignees of the goods. However, for the purposes of this application, it makes no difference whether the bills of lading for the cargo loaded at Marina di Carrara were 77 Hadjianastassiou J. GradeOne Shippingv. Cargoon Ship"CriosΠ"

(1980)signed by the master or Trimar as agents, as bills of lading may be signed by the master or the ship's agents. It is clear from the affidavits in.siipport of the application and the opposition that Trimar and Navigor were agents of the shipowners at Marina di Carrara and Pozzuoli respecti- 5 vely. It is also clear that the applicants are holders of bills of lading stamped 'freight prepaid' and the fact that tlie.freight has been prepaid is verified by the letter of the charterers dated 16.1.76. There is no allegation that in the bills of lading any conditions of the charter party were 10 incorporated." Then the learned Judge, having raised the question whether the respondents had a maritime lien on the cargo, as against the applicants either at common law or ex contractu went on to add:" No doubt at common law the shipowners have a lien on the cargo for freight irrespective of any contract but such lien does not exist in cases of freight prepaid as in the present case. If the bill of lading represents that freight has been paid the shipowner cannot,as against the assignee 20 of the goods who had given value,for them on the faith of that representation,say afterwards that it has not been paid. He can neither sue the assignee for that freight nor set.up a lien for it as against him. This proposition is supported by the case of Howard and Others v. Tucker & Others, 25 [1831] 1 Β & Ad. 712." Finally, the learned Judge, having quoted a number of cases, concluded his judgment in these terms:" It is clear from the above that the respondents have no maritime lien on the cargo, the subject matter of the present 30 proceedings, either at common law or ex contractu as the bills of lading were stamped 'freight prepaid' and no terms of the charter party were incorporated therein. The Order of this Court issued on the 9th June, 1976, for the arrest of the said cargo, was, therefore, issued on 35 insufficient grounds and is hereby discharged, after, of course, payment of all fees dues and charges incurred in respect of the arrest and custody thereof. Needless to say 78 15 1 C.L.R. GradeOneShippingv.CargoonShip"CriosII" Hadjianastassiou J. that the discharge Order affects only the cargo under the bills of lading stamped 'freight prepaid'." We think that, once the learned trial Judge rejected the argument of Mrs. Psyllaki that it was a fixed and well-known rule 5 of practice and procedure that the facts relied upon must be fully set out in the relevant documents of both parties in an interlocutory application, and that no evidence could be accepted, the question is whether, once Lestos gave evidence, he was entitled to produce the documents he had already signed. 10 With respect, the documents which the learned Judge excluded as being inadmissible, when Captain Lestos sought to produce them in giving evidence, appear to us to be prima facie admissible and they should not have been rejected because at an earlier stage of these proceedings they had been treated as being 15 inadmissible being produced in another way. With this in mind, we think that inasmuch as the said documents, if they were accepted in evidence, might have influenced or affected favourably the decision of the learned Judge regarding the credibility of Captain Lestos, we have reached the 20 conclusion that the order, the subject matter of this appeal, should be set aside for the reasons given earlier. As, however, such order has already taken effect since it was not stayed, we seeno practical reason to order a re-trial of the matter regarding the warrant of arrest. It is, of course, to be understood that 25 any party is at liberty to take any step or steps which may be deemed necessary for the protection of their interests pending the trial of the action. As we have not pronounced on the other issues raised before us during the hearing of the appeal, and as such issues were 30 decided by the trial Judge for the purpose of dealing with the matter of the warrant of arrest, we think that we should leave such issues open as issues to be determined at the trial of the action. For the reasons we have given at length we would allow the 35 appeal. Appeal allowed, with costs in favour of the appellants. Appeal allowed with costs. 79