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(1989)1989August3 (STYLtANlDES,J.) NORDIC BANK PLCOFNORDIC BANK HOUSE, Plaintiffs, v. THESHIP«SEAGULL.NOWLYINGATLIMASSOL PORT, Defendant. (Admiralty Action No. 358/84). Admiralty — Proceeds of saleofship arrestedand sold by the Court — Thefund isunder thecontrol of the Court andnot ofany particular Judge thereof. Admiralty — Practice— Proceeds of saleof ship arrested and sold by order of the Court — Application for thedetermination of theorder 5 ofpriorities in distributing thefund — Whether suchan application should be made in the action, in which theship had been arrested and the order for sale was issued— Question determined in the negative — Such application or motion may be made in any proceedings — Notice of theapplication should begiven toallthose 10 who entered acaveatand toothersasthe Court may direct. Admiralty — Conflict ofLaws — Order ofpriorities among claimsagainst the ship or theproceeds of her sale— Governed by the lex fori — The Court, however, will look at thelaw governing the substantive right in order to determine itsnature. Admiralty — Conflict oflaws — Order ofpriorities among claimsagainst the ship or the proceeds of her sale— The International Brussels Convention 1926 — It is not binding on thisCourt, becauseit was not part of the Cyprus or English Law on the day preceding Independence day and it wasnever ratified under Art. 169 of the 2 0 Constitution. Admiralty — Mortgages — Foreign mortgage — Need not and, indeed, cannot beregistered in Cyprus. 420 15 \ IC.L.R. NordicBankv.Ship«Seagull» Admiralty—Mortgages—Priority between a mortgagee and a , possessory lien— Therightof theformerisdeferred totherightof thelatter. Admiralty—Possessory liens—Definition of—Actual possession of theshipuntilclaimant'sdemands aremet oruntilhersurrendertothe Marshalunderan orderofthe Courtisa necessaryprerequisiteforits existence — The Master and crew as regards their wages until surrender, the captainfor his disbursement and repairersfor their remuneration and disbursements have such alien— Thelienisnot 10 transferable —Payment of claims covered by the lien does not entitlethepayer tothe lien,unlessitwasauthorized orapproved by the Court. 5 Admiralty —Maritimeliens—Cargoclaimsdo not carryamaritimelien and rankinpriorityafterallmortgage claims. 15 20 The ship «SEAGULL» was arrested in action 357/84. Following judgment the ship was sold and the proceeds lodged in Court. Caveatswereentered against the release ofthe proceeds. This application for determining the order of priorities in the distribution of such proceeds was filed by the plaintiffs {judgment creditors)inthisaction 358/84. The applicants were mortgagees of the ship.The ship carried the Greek flagand the mortgagewasdulyregistered in Greece. 25 30 The judgment-creditors in action 357/84 (Claimants 357) obtainedinthatactionjudgmentinrespectofmonieswhichtheyhad paid under a management agreement for goods and materials supplied to the ship and for her operation and maintenance, for repairs and equipment thereof, payment of charges, dues, crew wagesandemolumentsandotherdisbursements inconnection with theoperation oftheship. Thejudgment-creditorsinaction 114/85(claimants 114)obtained inthataction judgment forlossbyshort-landing of cargo. 35 Claimantsraisedtheobjection thattheproceedsofsaleofthesaid shipareunderthe controloftheJudgewhoissued theorder for her saleandthattheapplicationshouldhavebeen madeintheaction,in whichtheshiphadbeen arrested and sold. 40 Claimants 357 claimed priority on the ground that by the payments, which they effected, theyhad stepped intothe shoesof the crew, the repairersand those who havepaid the disbursements and,thus,theyacquiredapossessorylien.Thisclaimraisedtheissue of what isand how a possessory lien isacquired and retained and 421 Nbrdit Bankv.Ship«Seagull»

(1989)whether it is transferable (without assignment) The evidence adduced established that these claimants had neverhad the shipin their possession and that the Management agreement, which they invoked, had been terminated some time before the ship's arrest. Claimants 114invokedtheInternationa!BrusselsConvention, 1926, . 5 invirtue whereof their,claimranked inprioritytothemortage claims of the applicants.and submitted,that under Greek Law preferred mortgages rank after the.privileged claimscovered byAn\2 of such Convention. Thus, the issue was raised whether,the Convention is part of the Law of Cyprus;and, moreover, itbecame necessary to 10 determinefhe question whichlawgovernstheorderofpriorities. The legal principles expounded by the Court in determining the aforesaid issues appear sufficiently in the hereinabove headnote. The application of such principles to the facts pf this case lead the Court totheconclusion thattheapplicantsrankedinpriorityvisavis 15 the other two claimants. Asthe fund was not sufficient to satisfy in totoapplicants'mortage,therewasnoneedtodeterminethepriority asbetween claimants357and 114. Orderaccordingly. Noorderastocosts. 20 Cases reffered to: 77ie£vafl921]P.454; TheAfricano [1894]P.141; Vie Optima [1905] 742L.J.R.94; 25 «Rana» [1921]8 Ll.L.R.369; Donv. Lippmann

(1837)5CI.& F.l, 7E.R.303; TheMiiford

(1858)Swa362; The Ta^us[1903]P.44; TheColorado [1923]P, 102; 3 0 TheZigurds[1932] P.113; Commercial Bank v.Ship *PegasosflI>

(1978)1C.L.R..597; Williamsv.Allsup

(1861)19C.B.(N.S.)417, 142E.R.514; TheLyons

(1887)6"Asp.-Mar LawCas. 199; The Tergeste.[1903] P.26; ThePetonell917}P. 198; 35 422 1C.L.R. NordicBankv. Ship «Seagull» The<Leoborg(No.2)[1964] 1LI.L.R.380, The-Louisa». 166 Ε R. 900; TheJamesW. E/we//[1921] P. 351; TheBerostar[1970] 2Lloyd's Rep.403; 5 TheVasillia [1972] 1Lloyd's Rep

1. Application. Application for an order of the Courtdetermining the priorities to the several claimants against the proceeds of sale of the defendant ship «Seagull»lodged inCourt. 10 L Papaphilippou, for plaintiffs inAction No. 357/
2. A. Skordis, for plaintiffs inAction No. 114/
3. Cur. adv. vult. STYLIANIDES J. read the following decision. By this application the applicants -NordicBank Pic -seek: 15 A.An orderof theCourtdeterminingthepriorities tothe several claimants against the proceeds of sale of the defendant ship «SEAGULL», lodged inCourt. B.An order for payment outin the following order: (a)Marshal's expenses. 20 (b)Legal costs uptoand including appraisement andsaletothe plaintiffs inAction No. 357/84, to be assessed by the Registrar. (c) To the applicants (i)The amounts of US$53,689.05 and CY£1,050 paid by the applicants pursuant to the order of the Court dated 27th 25 November,
4. (ii) The amount of US$23,
5. paid by the applicants in settlement of Admiralty Actions 370/84 and 374/84, pursuant to the order of the Court,dated 20th March,1985; and (d) Any balance in Court to the applicants towards their 30 judgment debt and costs inthisaction.Action No. 358/
6. This application was servea) on the plaintiffs in Actions Nos. 357/84,370/84,374/84 and 114/85 attheiraddresses for service. 423 StylianidrsJ. NordicBankv. Ship«Seagull»

(1989)There is no quarrel as toMarshal's expenses orthe costs of the appraisement and saleinAction No. 357/

1. The Courton 27th November, 1984, authorizedthe applicants to negotiate, agree and pay wages and other emoluments of the master and members of the crew of the ship «SEAGULL», then 5 lying at the port of Limassol and that any money so paid by the applicants to be claimed by them as money expended in protecting and/or maintaining and/or enforcing their security under the mortgage in their favour and same to be afforded priority in the distribution of the eventual proceeds of sale of the 10 defendant ship. On20th March, 1985, theCourtauthorized thesame applicants to negotiate,settle and discharge the claims of themaster and the crew and the emoluments by way of contributions due to the «Naftikon Apomachikon Tamion» («Ναυτικόν Απομαχικόν Ταμείον»),for therespective period duringwhich each of the said master and members of the crew were serving on the defendant vessel, raised in Actions Nos.370/84 and 374/84, having served from 28th February, 1984 to 12th July, 1984 and from 12th July, 1984, until the sale of the vessel,and thatpriority be afforded in thedistribution of theproceeds of thesaleof thedefendantship as the claim for wages and other emoluments of the plaintiffs in the aforesaid actions,as ifjudgments for such wagesand emoluments had been obtained against the defendant vessel by the said plaintiffs and crew. ClaimantsMarineManagers Ltd.plaintiffs inAction No. 357/84 -against theship and claimants Office National D'Importation De Commercialisation DUR12Onicor,of Moroni CommorosIslands -plaintiffs inAction No. 114/85 against theproceeds of thesaleof the ship opposed this application. Both claimantsobtainedjudgment by default intheir respective cases. In the course of the hearing it was conceded by the said two claimants-tobe referred asclaimants357 andclaimants 114-that the Marshal's expenses, the legal costs of plaintiffs in Action No. 35 357/84, up to and including the sale, and the amounts paid in settlement of the actions 370/84 and 374/84, pursuant to orders of theCourtdated 27th November, 1984, and20th March, 1985, rank in priority. 424 15 20 25 1C.L.R. Nordic Bankv.Ship«Seagull» StylianldesJ. Thedispute,thus,waslimitedtotheprioritiesforthebalance. The ship «SEAGULL»was arrested at the port of Limassolin virtue ofawarrantofarrest,issuedon21stNovember, 1984,on theapplication oftheclaimants
2. 5 On22ndNovember, 1984,ActionNo.358/84wasfiledbythe applicants. On 28th December, 1984,judgments by default were issued against the ship in favour of claimants357 for US$722,499.93 withinterestat9%andcoststobeassessedbytheRegistrarandin 10 favour of the present applicants for US dollars totalling 1,476,267.68, plus interest asfrom 20th November, 1984, and costs. Onthe following day,thejudgment creditors-claimants357, applied ex parte for appraisement and sale of the ship and, on 15 completion ofthesale,paymentoftheproceedsintoCourt. Theshipwasfinallysoldon4thMarch,1985,atUS$730,000.andtheamountwaspaidintoCourt.Caveatswereenteredagainst therelease/paymentoutoftheaforesaid proceeds. ThereafterthisapplicationwasfiledinAdmiraltyAction358/
3. 20 Theclaimants-opponentsraisedthefollowing objections:1.ThisCourtcannotentertainthisapplicationmadeinActionNo. 358/84,astheshipwasarrested,appraisedandsoldinActionNo. 357/84 and that the proper coursewasto.file the application in AdmiraltyActionNo.357/
4. 25 2.Claimants114submitted that, invirtueoftheprovisionsof «TheInternationalConventionfortheUnificationofCertainRules of Law Relating to Maritime Mortgages and Liens», commonly know as the «International Brussels Convention of 1926», their claim - being for loss by short landing of cargo - ranks in 30 precedencetothemortgageclaimoftheapplicants.Article2

(4)of the said Convention creates MaritimeLien for lossof cargoand Article3providesthatmortgagesrankinafter thesaidlien. 3.InaccordancewiththeMinisterialDecisionNo.54123/80for the registration of the ship in Greece, published in the Greek 35 Gazette,No.1179,dated21stNovember, 1980,issuedpursuant tothe GreekLaw,thatgovernstheregistration andthestatusof the ship, preferred mortgages rank after the privileged claims 425 StylianidesJ. Nordic Bankv.Ship«Seagull»

(1989)specified in Article 2 of the aforesaid International Brussels Convention and,therefore, claimants114rankinpriorityoverthe applicants, whose claim is based on foreign mortgage. This is based on the Greek Law, which is applicable in the present proceedings,astheshipwasregistered inGreece. 5 4.Theclaimoftheapplicantswasbasedonaforeign mortgage, not registered in Cyprus, and, therefore, it might be considered onlyas an equitable mortgage,which has no priority.

1. Marine Managers Ltd. -claimants357 -contended, further, thatthejudgment intheirfavourwasgiveninrespectofaclaimfor 10 disbursements and payments for goods and materialssupplied to the ship and for her operation and maintenance, for repairs and equipment thereof, payment of charges, dues, crew wages and emoluments and other disbursements in connection with the operation of the ship, on the basisof a ManagementAgreement, 15 dated 15th March, 1982, a photo copy of which was produced and, therefore, theyareentitled tostep intotheshoesofthe crew, the repairersand ofthose whomadethe disbursements. 6.Lastly,claimants357hadapossessorylienontheShipjwhich they never abandoned until delivery of her to the Admiralty 20 Marshal. Such possessory lien ranks in priority to applicants' claim. It was strenuously argued that, as the ship was arrested, appraised andsoldinAction No.357/84, noordercanbemadein any otheraction forpayment out.Insupport reference wasmade 25 to Rules 65, 67, 70, 74-77 of the Rules of the Supreme Courtof Cyprus in its Admiralty Juristiction (the «Rules») and the case of 77ie£va[1921]P.
2. Rules65,67,70 relatetocaveats. Rules 74-77 govern appraisement arid sale of property under 30 the arrest of the Court arid payment of the gross proceeds of the sale Uponcompletion thereof into Court. Counsel fortheapplicants,ontheotherhand,referred toRules 111, 112and 113,governing payment outof Court. Rule 111entitlesanyperson desiringthepaymentouttohimof
3. moneys in Court to apply to the Court or Judge for an order directingthe moneysinCourt tobepaid tohim; 426 1C.L.R. NordicBankv.Ship«Seagull» SlylianidesJ. Rule 112 provides that such application may be made without noticetoanyparty orperson, buttheCourt orJudge may require noticeof theapplication to beserved on any party or person. AndRule 113empowerstheJudge orCourttodirect evidence 5 to be adduced, as it shall think fit, as to the right of the person makingthe application tothemoneysinCourt, and makesuch an order ontheapplication asshall seemjust. InTheEvacase,(supra)HillJ.inthecourseofhisJudgmentsaid about the practice tobe followed (p.455):10 15 20 «InorderthatthepracticeoftheCourt, whichhasbecomea littlelax,maybeputintoproper form Ithinkitwelltostatethat whenanypartyhasobtainedjudgmentinadefault actionheis entitled to move for payment out, but he must give noticeof that motion to any persons who have intervened or entered caveats against payment out. If that procedure is strictly followed he isnot under any obligation to give notice to any other persons. Ifany other claimantsagainst thefund wantto be inapositiontoresistanorderforpaymentouttheymust,to entitle them to be heard, intervene or enter caveats. Unless that practice is followed, a party who is going to move the Court for payment out has no means of making sure that he has brought before the Court all the persons entitled to be heard». Thiscarries no further thesubmission of the opponents. 25 Itwasfurther arguedthatthecaseinwhichthesaletakesplaceis dealtwith byoneJudge and theproceedsare under hiscontrol; if application for priorities and for payment out ismade in another case, which isbeing, or may be dealt with byanother Judge, who hasnocontrolofthemoney,thissecondJudgehasnopower over 30 the fund. Isee no merit, whatsoever, inthis argument. Theproceeds of a sale constitute afund. The arrest enables the Court to keep the property as security. This does not at all imply that the Court holds the property only for that plaintiff or for that 35 t . plaintiff inprioritytoothersofthesame class.Thetrueviewisthat the Court holds the property, not only for the first plaintiff, but, also, for at least all creditors and it is upon the Court to decide payment out and to determine the priorities in distribution. {The Africano [1894]P. 141). 427 StylianidesJ. NordicBankv. Ship«Seagull»

(1989)In The Optima

(1905), 74,2, LJ R 94, atρ 96 itwas said «Where the proceedings are in rem against the property, and theproperty hasbeen arrested andsold by theCourt,itis true that - the Court having the proceeds in its hands, and having freed the property by virtue of the sale from all liens 5 and claims against itinthehandsofthepurchasers,who take it by virtue of the title conferred by the Court - the Court retains the proceeds to answer certain claims which might have been made against the property» This Court is vested with jurisdiction under section 19 of the 10 Courts of Justice Law, 1960 (Law No 14/60), to determine questions of priorities, as theAdministration of Justice Act, 1956, section

(7)gave the HighCourtinEngland,sitting in Admiralty, jurisdiction todeterminequestion of titletotheproceedsofsaleof a ship by orderof theCourt Thejunsdiction isvested intheCourt 15 and may be exercised, invirtue of theprovision ofsection 11

(2)of the Administration of Justice (Miscellaneous Provisions) Law, 1964 (Law No 33/64), in the first instance by any Judge or Judges The payment after the sale is made out on the order of theCourtoraJudge. TheRules,towhich reference was made,do 20 not restrict the exercise of the jurisdiction for determination of pnonties to an application in the action in which the ship was appraised and sold In the «Rana» [1921] 8 LILR 369, the ship was actually arrested inanactionby Messrs CharlesYoungfor necessanes, the 25 order for appraisement and sale was made in another action by Mr Polites, whose claim was in respect of moneys he paid for necessanes and to the crew, and the motion for determinationof pnonties on the fund in Court was made and decided in a third action,thatof the first mortgagees, after noticetoall concerned 30 The fund, which is the result of the sale, represents the res Itis under the control of the Courtand,as thepnontiesare in general reserved, the Court directs payment of claimants in order of priority in an application or motion made in any proceedings, provided thatnotices thereof aregiven,as provided in the Rules, or directed by the Court At theheanng of such motionany other party may be heard in opposition, provided that he has either enteredacaveat against release/payment out,orhasintervenedin the action inwhich the motionisbrought on for heanng Thefirst ground fails 40 428 1C.L.R. NordicBankv.Ship«Seagull» StylianidesJ. Thejudgment for theapplicantswasgivenon aclaimbased on a foreign mortgage. The judgment in Action No. 114/85 was in respect of loss or shortlandingof cargo in 1982. 5 Thesubmission ofcounsel forclaimants114raisesthe question ofthe lawtobe applied. Ithastobe determined whether the lex fori, orthe lexloci,the Lawof the Rag applies. In Don v. Lippmann

(1837)5 CI. & F.l, 7 E.R. 303, Lord Broughan stated that «whatever relates to the remedy to be 10 enforced, mustbedetermined bythelexfori». In The Milford

(1858)Swa. 362, 366, where an American masterofanAmericanshipclaimedinEnglandalienonthe freight for his wages, Dr. Lushington declined to consider whether by United States Law he had no such lien, but applied the lex fori, 15 saying: «theproceeding originated inthiscountry; itisa question of remedy, not of a contract atall». In The Tagus[1903]P.44,the claim ofthe foreign masterof an Argentinevessel inan English port,consisted of1.Wagesassupercargo, and afterwards as master, 20 2.Disbursementswhilstactingassupercargo,and afterwards as master. On thequestion ofpriority as againsta mortgagee intervening, Phillimore,J., adopted theprinciple laiddown in TheMilfordand held that the question was one of remedy, and, therefore, the lex 25 fori applied with regard to property which waswithin the English jurisdiction. In The Colorado [1923]P. 102,a French shipwasarrested and soldinEnglandinan action fornecessaryrepairseffected inGreat Britain. There were claims in respect of the wages of the master 30 and crew, disbursements of the masterand repatriation of master and crew. There was a claim by a French mortgagee. The Court was moved on behalf of the repairer for payment out, subject to the admiralty preferential claims of the master and crew as merchant landholders.Thequestion fordecisionwaswhether the 35 repairers or the mortgagees, subject as aforesaid, had priority as between themselves.Itwasheldthatthequestion ofprioritieswas governed bythe lexfori, but thatthe nature ofthe right conferred 429 StylianidesJ. NordicBank v.Ship«Seagull»

(1989)by French Law on Mortgagees must be considered; when the natureoftherightwasascertained,EnglishLawmustbeappliedin placing such a right in its proper place in the English Law of priorities.Atkin, L.J., said atp, 110.«...; but toascertain theremedies which theCourt willgive toenforce therightswehavetolooktothelawofthiscountry, the lex fori. 5 Now when an action in rem has been brought in these Courtsinrespectofaship,theCourtbyitsdecreecontrolsthe money which represents the res as the result of sale or bail, 10 and directs payment to be made to such claimants as prove their claimsin the order of prioritydirected by the Court. To givethe necessarydirectionsthe Court mayhave to consider foreign law inordertoascertain whether theclaimanthasany and what rightin respect ofthe resatall». 15 Andatp.111:«I think it follows that prima facie, when the Court is ordering that payment should be made to claimants in a particularorder, itismerelyawardingaremedy,and therefore willapplythe lexfori. But,as[ havesaid,itmust firstascertain 20 whether there isanyclaimatall.Now,whenaclaimant comes . forward alleging that he holds a right given to him by agreement, which issomethingotherthan a maritimelien, he must prove what that right is by the law of the place of the contraci». lnTheZigardir[l§32)P. 25 113,at pp. 121-122itwassaid:- «The first answer to his contention was of course that German lawhasnothingtodowithquestionsofpriorityinthis country,which arefoterrbtneo*accordingtothelexfori only, and although he covered much ground in his efforts to 30 distinguish the present casefrom thegeneral ruie; over some ofwhichIproposetofollowhisargument,Iamoropinion that this is the last.answer, as Itisthe first, to the proposition for which he contended» 35 Atpp. 125-126:- . «Mr Atkins for the mortgagee Giatms The Cetfbrecfo as an authority in hisfavour. ItcEitairtlyissofo thisextent, that rH& only one" morfe of the hong lint* of 'authorities which have» 430 1C.L.R. 5 10 15 NordicBankv. Ship«Seagull*. StylianidesJ. established thattheEnglishCourtswilllooktoEnglish lawand English law only for thepurpose of ranking competing claims against a ship or its proceeds. Because in TheColorado case theCourt,inspecial circumstances,firstturnedaside tolookat a foreign law, in order to obtain light concerning the legal chaiacter of a foreign instrument,1 do notthink thatthe case can be claimed as an authority for the introduction of any foreign law which any party chooses to adduce in-order to qualify and alter the English rules of ranking. Indeed it is noteworthy thatbothHillJ.andtheCourtofAppeal declined to take any noteof theFrench-law in,thematteroutsideof the. instruction which they derived from-the evidence as to the nature of a French'hypotheque'.Oncetheywere clear as to what itwas, they returnedatoncetotheEnglisfrlawto decide theorder of its ranking». (See,,also, Commercial Bank ν Ship «Pegasos HI* {1978) 1 C.L.R.597, pp. 607-608). The proper law for the determination of priorities is the law of this country, the lex fori. The law applicable in this country isthe 20 Constitution,the Statutes Law of Cyprus, the English Law in its Admiralty Jurisdiction on the date preceding IndependenceDay and any Acts of the Imperial Parliament, the operation of which was extended during the Colonial Rule tothis country. TheInternationalBrusselsConvention 1926 was notpartofthe 25 English Law before" IndependenceDay..It was notratified and its operation was riot-extended to the colony of Cyprus by th* Imperial Government during the Colonial Rule, so as by succession of state tOTEontinuietobe.tfi ioperatton.ItHasnotbeen ratified by the Republic of Cyprus, in accordance with the 30 provision of Article 169.3 of our Constitution andis rrot%fn&rig upon thisCourt. Under our law cargo claims carry no maritime lien and rankin priority after all mortgage claims. Foreign mortgages need not and indeed there is no statutory 35 provision ormachinery for theirregistration in Cyprus. TheclaimOftheapplicants isbased on Firstdeferred Mortgage on the-ship «SEAGULL., dated 25th February, 1982, duly registered agairistherifi theShip's Register inPeraeui. 431 StylianidesJ. NonficBankτ.Ship«Seagull»

(1999)On theauthorityof 77ieColorado case (supra),if itis necessary to determinethe natureof theright created underthis mortgage, theCourtmaylooktotheLawoftheContract,butthereisnoneed inthis case. The applicants - mortgagees rank in priority to the claimants 114. 5 Apossessory lien has priority over amortgage, even inrelation to a mortgage executed before the assumption of possession (Williams v.Allsup

(1861)19 C.B.(N.S.)417,142E.R.514).Inthe instance of amortgage thepossessory lienee doesnottaketheres 10 cumonere.Where however possession isgivenupthesecurity of thecommonlaw lienislostandthemortgageprevails -{The Lyons

(1887)6 Asp. Mar.Law Cas. 199; 57 L.T.818). Claimants 357 - MarineManagers Ltd.-contendthatthey have a possessory lien, as thejudgment was given inrespect of claims 15 for disbursements andpaymentsfor goods andmaterialssupplied to the ship and for her operationand maintenance, for repairs to the ship and for her operation and maintenance, for repairs and equipment thereof, payment of charges, dues, crew wages an emoluments and other disbursements in connection with the 20 operation of the said ship.They, further, claim precedencetothe mortgagees, especially for the part of their claim which refers to crew wages and repairs. All payments and disbursements were effected on the basis of the Management Agreement, dated 15th March, 1982, photo 25 copy of which was producedintheseproceedings andincase No. 357/84, inwhich judgment by default was obtained. The essential elementof possessory lien isactualpossession of the ship until possessor's demands have been met, or she is surrendered to the Marshal under an order of the Court. The 30 master andcrew have apossessory lienandareentitledtopriority for their wages up to the date of surrender; also, the captain's disbursements. Those items,therefore, are inthe first instance to be paid outof thefund inCourt. In The Tergeste [1903] P.26, PhillimoreJ.said atp.33:«It is said that they had no possessory lien, because the master and crew were onboard; if thatwere the rule a great number of shipwrights' liens would be disturbed. Thatman 432 35 1C.L.R. 5 10 NordicBankv.Ship«Seagull» StylianidesJ. has a lien who has such control of the chattel as prevents it being taken away from his possession. He may admit other persons or workmen to access to the chattel, and other tradesmen mayclaimapossessorylienoverthechattelorpart of it,but ifitcannotbegotout ofthe dock oryardwithout the consent of the owner of the dock or yard, the owner of the dockwillhaveapossessorylien,thoughperhapsnottheonly one, on the chattel, which he can enforce, and which the Court has taken upon itself to enforce for him as against subsequent claims. Ihave no doubt in this case that Rait & Gardinerhad an ample possessory lien». Andatp.34:- 15 20 «In my judgment Messrs. Rait &•Gardiner had here a possessory lien for the work which they had done, though they had not finished allthework.Theymighthaveasked for paymentonaccount,astheywereentitledtodo.Theyhavea possessory lienon alltheworkthey have done, and thatHen takes precedence of any claim, even a maritime lien, which has accrued since the ship first came into the possession of Messrs.Rait&Gardiner». Payment of the wages of the crew and the master and disbursements incurredbythemasterand ofrepairersdoesnotby itself entitle the payer to the possessory lien.The lien, thus,isnot transferable. 25 30 35 InThePetone [1917]P.198,Mr.JusticeHill,afterreviewingthe authoritiesisreported at p. 2 0 8 «These, 1 believe, are the cases. For the view of the more modem text-writersImayrefer tothe 13thedition of Abbott, p. 883,the 14th edition, p. 1035, and vol.26 of Halisbury's LawsofEngland,p.625.Theytreatmaritimeliens,otherthan liensfor bottomry, asnot transferable. In my view the weight of authority isstrongly against the doctrine thatthemanwhohaspaidofftheprivileged claimant standsintheshoesofthe privileged claimantand hashislien, whether itbe regarded as a general doctrine or asapp'i?dto wagesonly. I say nothing about contractual assignments of debts or claims supported by maritime liens. It is not necessary to 433 StylianidesJ. Nordic Bankv.Ship«Seagull»

(1989)considerhowfarsuch anassignment carrieswithitinallcases themaritimelien;itdoessointhecaseofbottomry;whetherit does so in any other cases it is not necessary to express an opinion. In the present case there is no question of assignment. The plaintiffs paid the wages and/or disbursements.Themasterand crewhavebeenpaidandtheir debts satisfied. They assigned nothing to the plaintiffs. The plaintiffs do not claim astheirassigneesbut intheirownright ashaving paid the men off». 5 Thesameprinciplewasreiteratedandapplied in The«Leoborg» \Q (No.2) [1964] 1LI.L.R. 380.(See,also,The «Rana»case (supra); ThomasMaritime Liens,paragraphs 472,476and

1. In «The Louisa» 166 E.R. 900, repayment advances made to salvorswere refused. Onlywhen payments are authorized orapproved bythe Court, the payor enjoys the benefit of the privileges enjoyed by the payees -{TheJames W.Elwell[1921]P.351,357; The Berostar [1970]2Lloyd'sRep.403;TheVasilia[1972]1 Lloyd'sRep.51). The payments by the claimants 357 were made under a 20 Management Agreement reads:«
2. As between the parties hereto any superintendent, master, officer or crew member employed on the ship or in connection with the provisions of the services hereby contracted for shall be deemed to be the servant of the 25 Owners...» Iwent through the whole Management Agreement and Ipaid particular attention to clauses 3, 4, 7, 8 and 10, as well as the affidavit ofMr.Christofides, filed insupport of the opposition. Thepaymentswere made aspartoftheirmanagement services 30 or duty. They were neither crew nor repairers. There is an undertaking in clauses 7 and 8 by the owners that they would remunerate and reimburse the Managers for all their payments and serviceswhich are particularized inthe said paragraphs. There is nothing establishing or even indicating that the vessel 35 wasever inthe possession ofclaimants
3. Itwas deposed on oath bycounsel for the applicants that the Management Agreement wasbroken inOctober 1984, whilst the 434 15 1C.L.R. Nordic Bankv.Ship«Seagull» StylianidesJ. ship was at Iskenderum, and claimants 357 abandoned and/or ceased to manage this vessel ever since and lost any possessory lien which might have pre-existed. This was not contradicted by the claimants
4. 5 Before concluding, Iwish to state that in the rule of priorities, there would appear to be no immutable rules of law, but only a number of guiding principles, which, however, the Courts follow for purpose ofjustice and equity. Tosumup,the proceedsofthesaleofashipconstitute the fund 10 whichrepresentstheres.TheCourtholdsitforallthecreditorsand itisupon the Court to decide payment out and to determine the prioritiesindistribution.The fund isunder thecontrolof the Court andnotanyJudgethereof.Theorderofpayment ofclaimantsand the order of pnority ismade inan application or motion made in 15 any proceedings, not necessarily in the action in which the ship was appraised and sold, provided that notices are given as required bythe Rules, ordirected by the Court. The proper law for the determination of ranking competing claimsagainsttheshiporherproceeds isthelexfori.TheNational 20 BrusselsConvention, 1926isnotpartofourlawandisnotbinding uponthisCourt.Underourlawcargoclaimscarrynomaritimelien and rank in priority after all mortgage claims. Foreign nortgages neednot,andthereisnostatutoryprovisionormachineryfortheir registration in this country. The rights of the mortgagees are 25 deferred tothose allpersonshavingpossessory lien. The essential element of possessory lien isactually possession of the ship until possessor's demands have been met, or she is surrendered to the Marshal under an order of the Court. The masterand crewhaveapossessory lienandareentitledtopriority 30 for their wages up to the date of surrender; also the captain's disbursements and repairers' remunerations and disbursements. Possessory lien isnot transferable and payment ofwagesof the crewand themasterand disbursementsincurredbythemaster do notentitlethepayertothepossessorylien,unlesssuchpaymentis 35 authorized or approved by the Court. The payor is not, without authorityorapproval oftheCourt, entitled,bypaymentalone, to the privileges of a possessory lien. Inthepresent casethejudgment infavour oftheapplicantswas based on a FirstPreferred Mortgagedulyregistered in Peraeus. 435 StylianidesJ. NordicBankv.Ship«Seagull»

(1989)The claim of applicants 114isfor lossorshort landingof cargo. The mortgage has precedence over acargo. Claimants 357 made payments under a Management Agreement. Such payments, having regard to the terms and conditions oftheAgreement, didnotgiverisetoapossessorylien. 5 There isnothing establishing or indicatingthatthevesselwasever inthe possession of these claimants. Furthermore, the statement in the affidavit of counsel for the applicants that the Management Agreement was broken in October, 1984, whilst the ship was at Iskenderum and claimants 10 ceased to manage this vessel ever since, was not contradicted in any way. These claimants had no possessory lien at the material time, or indeed atany time. Foralltheforegoing reasons,Ihavecometotheconclusionthat 15 the order of priorities isas follows;(a)Marshal's expenses. (b)Legalcostsup toand includingappraisementand saletothe plaintiffs inAction No.357/84, tobe assessed bythe Registrar. (c)Tothe applicants - 20 (i)Theamounts of US$53,689.05andCY£1,050.-paidbythe applicants pursuant to the order of the Court dated 27th November, 1984. (ii) The amount of US $23,850.- paid by the applicants in settlement of Admiralty Actions370/84 and 374/84, pursuant to 25 the order of the Court, dated 20th March, 1985;and (d) Any balance in Court to the applicants towards their judgment debt and costsinthisaction, Action No.358/84. Asthefund isnotsufficient tomeetthejudgment debtunderthe mortgage of the applicants, I need not decide the precedence 30 between the claimants357 and claimants 114. Order is made for payment out of the fund in Court and proceeds of sale of ship «SEAGULL» according to the aforesaid order ofpriorities.Noorderasto costs. Order of prioritiesas above 35 withno orderasto costs. 436