(1989)1989January 9 (A.LOIZOU,P.,DEMETRIADES.PAPADOPOULLOSHDJiTSANGARIS, CHRYSOSTOMIS,NIKTTAS,ARTEMIDES,JJ.) TRAMPOILANDMARINELTD., Appellants, v. SCHIFFSHYPOTHEKENBANKZULUBECK AKTIENGESELLSCHAFTANDANOTHER, Respondents. AND THESHIP«PIGASSIOS·, Respondents-Plaintiffs. (CM!AppealNo. 7490). Admiralty—Proceedsofsaleofshipbypublicauctionpendentelite— Theorder ofpriorities ofpayments tobe madetherefrom— The generalorderofprioritiesmaybereversedifspecialcircumstances exist—Contracttosellmarinedieselandfueloiltoshipproviding thatdieproperty therein shallremain with thesellers (appellants) untilpaymentofprice—Neitherthis term northefactthatbutfor suchdieselandfueloildieshipwouldnothavearrivedinLimassol whereshewasarrested, amountto^specialcircumstances»vis-a-vis themortgageesoftheship(respondents). Thefactsofthiscaseaswellasthelegalprinciplesexpoundedby the Court in this case appear sufficiently from the hereinabove headnote. Appealdismissedwithcosts. Casesreferredto: CommercialBankoftheNearEastLtd. v.TheShip*PEGASOSllh
(1978)1 C.L.R. 597;. 46 15 1C.L.R. TrampOilv. Aktiengesellschaft Rlefs Ltd. &Others v.The Commercial Bank ofNear East Ltd
(1983)1 C.L.R.376; Stylianidesv.Narkissos
(1965)1 C.L.R. 291; •Silia»[1981]2Lloyd'sLawReports534. 5 Appeal. Appealagainstthejudgment ofaJudgeoftheSupremeCourt (Kourris,J.) given on the 27th October, 1987 (AdmiraltyAction No. 7/87) by which he determined, on the application of the appellants, the order of the priorities for payment out of the 10 proceedsofthesaleoftheship«Pigassios»onthevariousclaims againstthesaidship. X.Xenopoullos, fortheappellants. St.McBride,fortherespondents. Cur. adv. vult. 15 A. LOIZOU, P. read the following judgment of the Court. Thisisan appeal from thejudgment of aJudge ofthisCourtby which he determined, on the application of the appellants, the orderoftheprioritiesforpaymentoutoftheproceedsofthesaleof theship«PIGASSIOS»ofthevariousclaimsagainsther. 20 The said ship was supplied by the present appellants with bunkersatMombassa, Africa, andshe sailed toLimassolwhere she was arrested on the application of the respondents, her mortgagees, and she was ultimately appraised and sold. The proceeds of the sale, lessthe amount of U.S.$55,720.29, being 25 theamountoftheclaimofthepresentappellants,werepaidover tothejudgment-creditors.Theamountsoreserved inCourtwas keptthereasasecurityforthepresentclaimintheeventofitbeing shownthatitenjoyed prioritytothatoftherespondents. The case for the appellants is that, though in the ordinary 30 circumstancestheorderofprioritiesisfixedonprinciplesassame have been enunciated in a series of authorities, including the CommerdalBankoftheNearEastLtd., v. Theship *PEGASOS III»,
(1978)1C.L.R. 597, confirmed on appeal by the Case of BilefsLtd. &Others v.TheCommercialBankofNearEastLtd., 35
(1983)1C.L.R. 376, yet if there are special circumstances on grounds of equity, the order of priorities may be reversed. Relianceforthispropositionwasbasedontherelevantstatement of the law asappearing in Halsbury's Lawsof England, 4th Ed. Vol.43,paragraph 1142whichinsofarasrelevantreads: 47 A. LoizouP. TrampOil. v. AktiengcseUschaft
(1989)«Itwouldseemthatthedeterminationofthepriorityofliens overoneanotherrestsonnorigidapplicationofanyrulesbut ontheprinciplesthatequityshallbedonetothepartiesinthe circumstances of each particular case. However, there is,a general order of priority,and there are certain general rules 5 which, in the absence of special circumstances, the court tendstoapply.» Learned counsel for the appellant also cited the case of Stylianouv.Narkissos,
(1965)1 C.L.R.p.291,inwhichaJudgeof thisCourt found that inthe particularcircumstances ofthat case 10 there was room to change the ordinary order of priorities and referred, interalia,tothesameparagraphhereinabovesetoutbut inthe3rdEditionwhichiswordedinthesameway.Weneednot therefore dealanyfurther withthatcase. Thefactsofthepresentcasedonotjustifytheapplicationofthis 15 equitableprincipleasthelearnedtrialJudgedirectedhisattention tothisaspectofthecaseandconcludedthat«Therearenospecialcircumstancesinthepresentcaseso astodeviatefrom thegeneralruleandorderpaymentofthe aforesaid amount to Tramp Oil and Marine Ltd. The 20 mortgagee bankers were not parties to the said agreement andtheyhadnomeansofknowingofthesaidagreement.The factthattheagreementprovidedthatthedefendantshipshall hold the bunkers as bailee until payment of the price thus creatingacontractuallieninfavourofTrampOilandMarine 25 Ltd., does not in myopinion amounttospecial circumstan: ces.» WesharewiththelearnedtrialJudgetheconclusionreachedon thefactsofthepresentcase. Theargument advanced thatthe mortgagees benefited bythe 30 useofthosebunkersforthevoyageoftheshipfromMombassato Limassol and thatthesurplus ofthatsupply ofbunkerswassold togetherwiththeship,doesnot,inourview,changethesituation. Inconclusionuseful reference mayalsobemadetothecaseof *Silia» [1981] 2 Lloyd's Law Reports p. 534, to which Mr. 35 McBride,on behalf of the respondents hasdrawn our attention. That was a case in which the vessel «Silia» was ordered to be appraisedandsoldbytheAdmiraltyMarshalandinduecoursethe vessel was sold with everything on board belonging to her 48 1C.L.R. TrampOil.v.Aktiengesellschaft A.Lofcou includingunusedbunkerfuelandlubricants(theoil)remainingon boardher,suchoilbeingsoldfor$44,753.40. Theplaintiffs argued that that oilin«Silia»wasnot part ofthe ship;that the proceeds ofthesale ofthe oilwerenotpart ofthe 5 fund availabletoaplaintiff whohadobtained ajudgment inrem butthatastheoilwasthepropertyofBirkdale(herowners)before itssale andtheproceeds ofsalewerewithinthejurisdiction,any judgmentcreditorof Birkdalecouldlevyexecutionthereon,and theplaintiffs weresuchjudgmentcreditors. 10 Itwasheldthattheproceedscisaleoftheoilwerepartoftheres and as such available to thejudgment creditors in rem and the plaintiff's application inthatcasewasrefused. Foralltheabovereasons,theappealisdismissedwithcosts. Appealdismissedwithcosts. 49