(1989)1989February4 (PAPADOPOULOS,J) COLIMARITIME AGENCIESCOMPANY LIMITED, Plaintiffs, v. THESHIP-ELSEXTO»NOWLYINGATTHEPORTOFLIMASSOL, Defendants. (Admiralty Action No. 211/84). Admiralty — Jurisdiction of the Supreme Court — It is that exercised by theAdmiralty Division of the High Court of England on the day preceding Independence Day— The Courts of Justice Law, 1960 (Law 14/60), section 19(a)— TheLaw applicable isthat which was applicable in England by thesaidDivision on the saidday (section 5 29
(2))(a)of Law 14/60) — Therefore, theEnglish Administration of Justice Act, 1956 is applicable in Cyprus — Claim by agent in respectofdisbursementsmadeonaccount ofaship (section(l)(p) of the said Act) — It is within die Admiralty Jurisdiction — But such jurisdiction is,in virtue ofsection3, iftheaction isin rem,conditional 10 upon proof of onwership of the ship — Burden of proving ownership restson the plaintiffs. Contract — Entire contract — Whatisanentire orindivisible contract — Apassagefrom Halsbury's Laws of England,3rd Edition, Vol.8, p. 166,para. 184 cited with approval. 15 Agency — Shipping agency agreement,whereby theplaintiffs agreed to act as agents of the ship and supply her with materials — In the circumstances it must be classified as a divisible contract — Therefore, theagentscould demandpayment for materials supplied, notwithstanding that their obligations under die contract had not 2 0 been completed. Admiralty — Arrestofship — Whetherdefendant entitled todamagesfor the detention, if the action fails or the order is discharged— In the absenceof malafides orgrossnegligence onthepart ofdie plaintiff, no question of damagesarises. Admiralty — Arrest of ship — Damagesfor the detention —Assessment of (assumingthat they arepayable) — Duty of defendant to mitigate 76 25 1C.L.R. ColiMaritimev.Ship«ElSexto» hisdamage —Ship could have been released, ifthe defendant had put a security of £2,000 — Therefore, damages cannot exceed £2,000. 5 10 Theprinciplesexpounded bytheCourtinassumingjurisdictionto deal with the plaintiffs' claim fordisbursements incurred bythem as agents of the ship, in giving judgment for the plaintiffs, notwithstanding that the action was brought at a time, when they were still the agents of the shipand had not performed in full their own obligation under the contract, and in dismissing- the counterclaim for damages arising from the alleged wrongful detention of the ship, appear sufficiently in the hereinabove headnote. Judgment for the plaintiffsas per claim. Counterclaim dismissed. Costsagainstthe defendants. 15 Casesreferredto: . Kolokoudias and Othersv. Vamavidou and Others{1988)1 C.L.R. 566; · CY.T.A. v. TheShipMaria
(1983)1C.L.R.825; 20 Walter Tumbull and Others v. The owners of the .Ship *STRATHNAVER»,hercargo and freight[1875] 1 App. Cas58; The Evangelismos, Swa,378; ThePeri, 32 L.J.Adm.46; TheKeroula,11P.D.92; 25 The WalterD. Wallet[1893]P.202; .Poulson v. VillageBelle, 12TimesLawReports,630; Staikouras v„ The Ship CHARALAMBOS, (Adm. Action 16/69, unreported); 30 . The owners ofdieShip ZEUS v.TheCargoladen on theShip ZEUS and Others
(1970)1C.L.R. 294; Anastassiou v. The Ship MAHEE
(1982)1C.L.R.343. Admiralty action. Admiralty action for C £ l ,513.81 for various disbursements the applicants incurred asagentsofthe owners ofthe defendant ship. ?7 CoiiMaritimev.Ship«ElSexto»
(1989)St.McBride, forthe plaintiffs. M.Montanios, forthe defendants. Cur. adv. vult. PAPADOPOULOS J. read the following judgment. Thisisan actionbytheplaintiffsagainstthedefendantshipclaimingthesum 5 ofCY£1,513.81withinterest,aswellasthecostofthearrestand Marshal'sexpensesinmaintainingthedefendantshipinarrestand costsoftheaction. Itistheallegation oftheplaintiffs thatbefore thearrivalofthe defendant shipinCyprustheywereappointedasowners'agents, 10 of the defendants, and in that capacity they incurred various disbursements and spent moneyatthe request of the defendant ship.Itisalsotheallegationoftheplaintiffsthatshortlybeforethe arrival of the ship in Cyprus, they asked for the remittance of certain sums of money to cover anticipated expenses and 15 disbursementswhichwouldberequiredduringthestayoftheship in Cyprus, but no moneys were remitted. It is further their allegationthatbeforethedepartureoftheshiptheypressedforthe remittance of moneys but without avail. Asa result of the non paymentandtheimminentdepartureoftheshipfromCyprus,the 20 plaintiffsfiledanapplicationforthearrestoftheshiptosecuretheir due.Thisapplication wasfiled on the 9th ofJune, 1984andan orderforherarrectwasgivenbytheCourtonthatsameday. Thedefendants disputetheclaimoftheplaintiffsmainlyontwo grounds:First,thattheCourthasnojurisdictiontohearthiscase 25 andsecond,thatdieamountsduetotheplaintiffs bythe defendantswerenotduewhentheshipwasarrested.Itistheallegationof thedefendantsthatthearrestoftheshiponthe9thJune,1984was unlawful andasaresultofthisunlawfularresttheysuffered damage.Thelossand damage bythedefendants is,accordingtotheir allegation,duetolossofuseandrevenueand/orincomeattherateof$5,000adayfor 18days,duringwhichtimetheshipinquestion was unlawfully detained. Bytheir counterclaim theyclaim thesumof$90,000forthisloss. Asit has been decided inthe case of Ioannis Constantinides Kolokoudias&Othersv.Thoulia Vamavidou&Others,
(1988)1 C.L.R.566theCourtbeforeexaminingthemeritsofthecasemust first decide the question ofjurisdiction. TheSupreme Courtof 78 1C.L.R. CollMaritimev.Ship«ElSexto» PapadopoulosJ. CyprushasexclusiveoriginaljurisdictionasaCourtofAdmiralty vested with and exercisingthe samepowers andjurisdictionsas those vested in/or exercised by the High Court of Justice in England in its Admiralty jurisdiction on the day immediately 5 preceding the Independence Day, 16.8.1960, by virtue of the provisionsofsection 19(a)oftheCourtsofJusticeLaw1960(14/ 60)and the Administration ofJustice (MiscellaneousProvisions) Law1964(33/64).Section29(2}(a)of14/60referstotheLawto beappliedbysuchCourtandreads: 10 «itshallbetheLawwhichwasappliedbytheHighCourtof JusticeinEnglandintheexerciseofitsAdmiraltyJurisdiction onthedayprecedingIndependenceDayasmaybemodified byanyLawoftheRepublic». The relevant English Act is the Administration of JusticeAct 15 1956. According to section 1 of this Act, the High Court has jurisdictiontohearanddetermine anyofthefollowing questions orclaims: «(a) 20 (m)anyclaiminrespectofgoodsormaterialssuppliedtoa shipforheroperation ormaintenance; (p) any claim by a master, shipper, charterer oragentin respectofdisbursementsmadeonaccountofaship;» OnecaneasilyconcludethatatfirstglancetheHighCourthas jurisdiction on admiralty cases if the claims fall within the 25 provisions of (a) to (s) of section 1
(1)of the Administration of JusticeAct,1956.However, section3 ofthesameLawimposes certainlimitationstothejurisdiction.Section3readsasfollows: «3.ModeofexerciseofAdmiraltyjurisdiction. 30 35
(1)Subject totheprovisionsofthenextfollowing section, the Admiraltyjurisdiction of the High Court, the Liverpool CourtofPassage...mayinallcasesbeinvokedbyanactionin personam.
(2)TheAdmiraltyjurisdictionoftheHighCourtmayinthe casesmentionedinparagraphs(a)to(c)and(s)ofsubsection
(1)ofsectionone ofthisActbeinvokedbyanactioninrem againsttheshiporpropertyinquestion.
(3)In any case in which there isa maritime lien or other chargeonanyship,aircraft orotherpropertyoftheamount 79 PapadopoulosJ. ColiMaritimev.Ship«ElSexto»
(1989)claimed, the Admiralty jurisdiction of the High Court, the LiverpoolCourtofPassage...maybeinvokedbyanactionin remagainstthatship,aircraft orproperty.
(4)In the case of any such claim as is mentioned in paragraphs(d)to(r)ofsubsection
(1)ofsectiononeofthisAct, 5 being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was,whenthecauseofactionarose,theowneror charterer of, on inpossession or incontrol of, the ship, the Admiraltyjurisdiction of the High Court and (wherethere is io such jurisdiction) theAdmiraltyjurisdiction of the Liverpool Court of Passage may (whether the claim gives rise toa maritime lien on theshipor not)beinvoked byan actionin remagainst(a)that ship,ifatthetimewhen the action isbrought itis 15 beneficially owned asrespects allthe sharestherein bythat person;or (b) any other ship which, at the time when the action is brought,isbeneficiallyownedasaforesaid». ItisevidentthattheAdmiraltyjurisdictionoftheHighCourtis,in 20 thecasesmentioned inparagraphs(a)to(c)and (s)ofsubsection
(1)ofsection one of thisAct,automatic.Alsoautomatic isinthe caseswherethere isa maritimelienon theship.But,inallother cases,whichareprovidedinsubsections(l)(l)(d)to(r)oftheAct, areconditionaluponproof oftheownershipoftheship. 25 Before proceeding to examine if section 3
(4)applies, thatis, regardingthe ownership oftheship,I proposetoexamine firstif anyoftheprovisionsofsection(l){l)(a)to(s)apply.Inparticular, I will examine first the provision of (l)(l)(
- m)and (l)(l)(
- p)which appearatfirstglancetoapply. Ihave quoted the provisions of section (l)(l)(p)above,which reads: «(p)any claim by a master, shipper, charterer oragentin respectofdisbursementsmadeonaccountofaship;» Ihaveexaminedthesubmissionsofbothcounselonthematter. 35 Ihavenodifficulty indecidingthatsection (l)(l)(p)appliesinthe presentcase.Itisclearthattheclaimisinrespectofdisbursements made on account of a ship by the plaintiffs who were the authorisedagents. 80 30 1C.L.R. CollMaritimev.Ship«ElSexto» PapadopoulosJ. Iwould nowproceed to examine ifthe provision of (l)(l)(
- m)also applies, that is, if this is a claim for goods and materials suppliedtotheshipinheroperationormaintenance.Itisnotvery clearfrom theevidence whatexactlywassupplied totheshipat 5 thedatepriortoherarrest,orifanymaterialsatallweresupplied. Onemightsupposethatonlyservicesweresuppliedtotheship, suchaslaundryservices.Onthedisbursementsaccount,exhibit1, which wasproduced tothe defendants on the 16thJune, 1984, onecanreadthatwaterwassuppliedtotheship.Mrs.Katsantoni, 10 who is the owner of the company and the Manager, in her evidence before theCourtstatedthatthewaterwassuppliedon the7thofthemonth(7.6.84).Weknowthattheshipwasarrested onthe9th.Mrs.Katsantonisaidinherevidencethatthebillforthe waterwaspaidtothewatersuppliersonthe11thofJune.Inother 15 words,theamountforthesupplyofwater,whichissomethingthat canbeclassifiedas«materialfortheoperationoftheship»,wasnot knowntotheplaintiffsbeforethe11thJune,84.Itfollowsthatthis amount could not be demanded for payment before the 11th June, 1984and, consequently, one cannot saythatthisamount 20 wasdueatthetimeofthefilingofthisaction.Thesituationcannot be any more clarified by the affidavit of Eliana Constantinidou made,swornandsignedonthe9thJune,84.1speak,ofcourse,of theaffidavit insupportoftheexparteapplication forthearrestof the ship. Thisaffidavit isgeneral. It does not specify either the 25 amountsthen due, for whatpurpose these amountswerespent andwhen. Inconclusion, Iamnotsatisfied that theprovisionof section(l){l)(m)appliesinthecaseunderconsideration. Iwouldnotgoanyfurther toexamineanyotherissues,suchas whatisnecessaryandwhatisnotnecessaryfortheoperationand 30 maintenanceoftheship.NorshallItrytodefineorlimitwhatcan beclassifiedas«forthemaintenanceandoperationoftheship»as aprerequisiteprovidedbysection(l)(l)(m)oftheAct. Havingbeen satisfied thatsection (l)(l)(
- p)isapplicable inthe present case, Ishallnowproceedtoconsideriftheprovisionsof 35 section3,paragraph
(4)aresatisfied, thatis,theownershipofthe ship. Averyimportant pointraisedbyMr. Montaniosinthepresent case is that of ownership. According to the above section the ownershipoftheshiphastobe established before theAdmiralty 81 PapadopoulosJ. ColiMaritimev.Ship«ElSexto»
(1989)jurisdiction of the High Court is invoked for an action in rem against the ship. The leading Cyprus case on thematteris thatof C.Υ.T.A. v. TheShip Maria
(1983)1C.L.R.825.Inthatcaseitwas clarified that, «... thatonce the question of ownership of theship was in issue the burden was upon the plaintiffs to prove thatatthe time of the institution of the action the ship was beneficially owned as respects all shares therein ...» 5 Inthepresentcase,notonlytheownershipoftheshipwas notin dispute at any stage, but thereis also affirmative statementtothe 10 effect thattheownership isadmittedby thepersonsappointingthe plaintiffs as theagents of theship. (Seeexhibit PL2) Inthelightof the above findings Iamsatisfied thattheSupreme Court of Cyprus has jurisdiction and has had jurisdiction tohear thisaction. Ishallnowdeal with theclaim.Theplaintiffs calledone witness, Mrs. Despina Katsantoni,who is the owner of the company and theManager.Shedescribedtheway shesuppliedvarious itemsto the ship and how she asked for moneys which were not forthcoming and when the ship was about to sail after the 20 completionof thedischarge ofthecargo,sheappliedtotheCourt for a warrant of arrest, which was eventually issued. It is her allegation that the expenses incurred for the defendant ship amountedto£1,513.81.Sheasked forthemoneyfromtheMaster andfrom theowners,butnoonepaidher.Theamountisstilldue. 25 As a result of the non payment and the delaying tactics of the defendants, she had togiveuptheagency of theship onthe14th of June. Thedisbursementsaccount,exhibit 1,was preparedandplaced before thedefendants on the 16th of June, 1984.1 mustsay mat 30 the disbursements accountof theplaintiffs has notbeen seriously challenged by thedefendants inthesense thattheamountsstated inthedisbursementsaccountdidnotseem tothedefendants to be unreasonableorunjustified. Theonlysubmission or exaggeration on the account was directed to the fees of the plaintiffs but no 35 alternative suggestion was made nor did any evidence appearto contradictorsuggestthattheamountwas exorbitant.Idonotthink 82 15 1 C.L.R. Coli Maritimev.Ship«ElSexto» PapadopouiosJ Ishould say more about the proof of the claim of the plaintiffs otherthan Iam fully satisfied that the amount claimed hasbeen proved. Ishallnowproceedtoexamineiftheplaintiffsareentitledtothis 5 amount, inviewofthesecondbasicobjection ofthe defendants, namely,thattheagencyagreementwasanindivisiblecontractand theplaintiffs couldnotclaimunderitanypartpayment before its conclusion. The defendants submitted that the plaintiffs are not entitled because they had not completed their part of the 10 obligation whichwasanentireobligationandnotadivisibleone, andwhentheplaintiffs filed theiraction,onlypartofthecontract hadbeenconcluded.Secondly,accordingtotheallegationsofthe defendants, the action was premature and it follows that when they filed the application for the arrest of the ship onthe9thof 15 June, 84, they had no such right. It is the allegation of the defendantsthatnoonecanclaimunderanentirecontractbeforeit iscompleted. Mr. McBride for the other side, submitted that this is not an entire contract, it is a divisible contract and the plaintiffs were 20 entitled to claim any amount, something which in fact they did, from thedefendants andonlywhentheysawthatthe defendants were not ready and prepared to pay them they had to file this actiontosecuretheirdue. InHalsbury's LawsofEngland3rd edition,Volume 8,p.166, 25 paragraph 284,itisstated: 30 35 «284.Entireanddivisiblecontracts.Thereisadistinctionto be drawn between contracts which are divisible and those which are indivisible, and the distinction is of particular importanceinregardtoquestionsofillegalityandquestionsof payment.Contractsareindivisiblewheretheconsiderationis one and entire, or where itisstated or can be gathered by necessaryinference thatnoconsiderationistopassfromone partytillthewholeoftheobligationsoftheotherpartyhave been completed; but where no such intention can be gathered, and the contract resolves itself into a number of considerationsforanumberofacts,asinthecaseofperiodical payments for a number of services which do not form one completewhole,thecontractisdivisible. Inanindivisibleorentirecontracttherighttopaymentdoes 83 PapadopouiosJ. ColiMaritimev.Ship«ElSexto»
(1989)not arise until the contract has been completely performed; but if there has been substantial performance a claim will be allowedsubjecttoanycounterclaim orset-off foromissionsor defects in execution. Ifacontractisdivisible,forexamplewhereasellerofgoods 5 agreestodeliverbyinstalments,therighttopaymentarisesas each part of the contract is performed and where there has been partial performance a proportionate payment may be recovered. Aclaim can alsobe made where itcan beinferred from the 10 circumstances that there is a fresh agreement between the parties that payment shallbe made for work already done or goods already supplied under the original contracts, as for example where a buyer of goods accepts less than the stipulated quantity». *•*> The contract under consideration is a shipping agency agreement whereby the plaintiffs agreed to be the agents of the shipand supplyherwithvariousitemsand materials. Ihave no doubt thatthisisacontractwhere the intention ofthe parties is not expressed whether it is an entire contract or a 20 divisiblecontract. ButIfeel surethatitresolvesitselfintoa number ofconsiderations for a number ofactsfor periodical payments for anumber of services which do not form one complete contract.I am inclined to classify itas adivisible contract. Infact, one might expect that for each one and complete actthatthe agentsdidfor 25 h e benefit of the plaintiffs, they would be entitled to immediate payment if demanded and such separate acts would form other ;ontracts.Infact, such periodicalpaymentshavebeen demanded, :ontrary to what Mr. Montanios tried to submit in crossaxamination. These demands are exhibited in a number of 30 documents, which are before the Court. (See telexes, exhibit D6 ind exhibitD7). One other factor which Ihave to consider isthe suggestion by Mr.Montaniosthat the plaintiffs would collectmoneyfrom athird Derson and so the obligation of the defendants towards the 35 plaintiffs would be discharged. I cannot accept this suggestion. Ihe debt between the plaintiffs and the defendants was between hese two parties only and no agreement, whatever, has been nade withathirdpersonforthereimbursementofanydebtbythe :>netothe other. Iwould thinkthatthedirectiontotheplaintiffs to 40 84 1 C.L.R, Coli Maritimev.Ship«ElSexto» PapadopouiosJ. collect demurrages due to a third party for a debt by the defendants totheplaintiffs, wasonlyamode of delayingtacticsin payment, but which, in any event, have never been agreed between theplaintiffs and the defendants. 5 In the light of my above findings, Iam of the opinion that the plaintiffs are entitledtotheir claim. Ishall now proceed to examine the counterclaim. Ithas been established for overhundred yearsthat there can be no claim for damages for detention of a ship under warrant of arrest. (See 10 Walter Tumbull and Others v. The owners of the ship *STRATHNAVER»,herCargoandFreight[1875]1App.Cas.58). Thislegal proposition hasbeen stressed overand overagainin a number of cases. (See The Strathnaver [1875] 1 App. Cas.58 (whereinanactioninremtheplaintiff failstoestablishhiscase,the 15 Courtwillnotordinarilyorderhimtopaydamagesforthearrestof the shipproceeded against, but incasethearrest isan actof mala fides, or an act of such gross negligence as to lead the Court to implymalice,theCourtwillawarddamagestothedefendant). See alsoTheEvangelismos, Swa.378; 77iePeri, 32L.J.Adm.46; The 20 Kerouia,11P.D.92;77ieWalterD. Wallet, [1893]P.202; Poulson v. VillageBelle, 12TimesLawReports 630). Inexamining the question of mala fides a littlefurther, one can say that the Judge giving the order for the arrest isnot obliged to do so. His power isdiscretionary under Order 50 of the Cyprus 25 Admiralty Jurisdiction Order, 1893. This was said in the case of Staikouras v. TheShip 'CHARALAMBOS', AdmiraltyAction No. 16/69, unreported butcitedbyTriantafyllides exPresident ofthis Courtinthecaseof TheOwners ofTheShip 'ZEUS'v. TheCargo laden on the Ship 'ZEUS' and Others
(1970)1 C.L.R. p. 294, 30 whereJosephides,J. saidthat«thepoweroforderingthearrestof theshipisdiscretionary».See,also,thecaseAnastassiouv.TheShip 'MAHEE',
(1982)1C.L.R. p.343.So, theJudgewho isordering the arrest of the ship willhave to relysquarely on the contentsof theaffidavit insupport of suchapplication, whichismade usually 35 «ex parte». If the Judge in examining the affidavit in support is satisfied, thenhe willgivetheorderforthearrest.ButiftheJudge makesamistake,forinstance,astheapplication oftheLaw,andin a given case the Judge considers that the claim of the plaintiff- 85 PapadopouiosJ. ColiMaritimev.Ship«EISexto»
(1989)applicantfallswithintheprovisionsoftheAdministrationofJustice Act 1956,section (l)(l)(m) and he grants the order for the arrest, whilst he has, under the Law, no jurisdiction to do so, in such a case, of course, there isno mala fides on behalf of the plaintiff. The only casewhere theplaintiffs willactinbad faith iswhenthey 5 includeintheiraffidavit insupport oftheapplication forthearrest, matterswhichare untrueand are intended tomisleadand deceive the Judge before whom such application appears. Itis definitely not the casebefore me. Inthepresent caseitis,inmyopinion,impossibletofindsignsof 10 fraud or gross negligence on the part of the plaintiffs in arresting theship,norcanone findmalafidesorsuchgrossnegligence asto lead theCourt toimplymalice.Thisisasimple casewhere agents had a claim againsta ship,they demanded payment, repeatedly, theshipwasduetoleaveandtheonlywaythatseemed atthetime If tothe plaintiffs open to enable them tocollecttheirdue,waswith the assistance of the Court by arresting the ship. There might be otherwaysbutcertainly,inmyopinion,the plaintiffs didnotactin a way that would entitle the defendants to claim damages for wrongful arrest. If Iam wrong in myjudgment as to whether the 20 defendants are entitled toclaim damages bywayof counterclaim, Ishallproceedtoexaminethepropositionontheassumption that they areentitled to damages and makean effort to assess them. There was an order for the arrest of the ship.The defendants came before the Court, through their advocates, on the 13th of 25 June, 1984, on the 18th ofJune and on the 21st ofJune and the maximum amount that the defendants had to secure byway of a guarantee, sothat the ship could be atlibertytosail,was£2,000. Yet, the defendants, although appeared in Court and were well aware of the fact that inthe beginning the security sum was only 30 £1,500,which was later increased to£2,000, they failed to make any arrangements to provide a guarantee or a security to that amount,sothatthe shipwouldsail. ItisanestablishedprincipleofLawondamagesthatthe plaintiff has a duty to mitigate his losses. We have seen no signs 35 whatsoever, of any attempt to this direction by the defendants. The suggestion byMr.Montaniosthat theplaintiffs didnot apply forthereleaseoftheship,cannotbesustainedassection 60ofthe Cyprus AdmiraltyJurisdiction Order, 1983states clearlythat any party may apply for the release and the only condition for the 40 86 1C.L.R. ColiMaritimev.Ship«ElSexto» PapadopouiosJ. release of the ship by Stylianides, J., when giving the order, was that «theshipwould be released on filing of asecuritybond byor onbehalf oftheshipinthesumofCY£1,500.(SeeOrderofthe9th June, 1984,paragraph3). 5 Itfollows that even if the arrest of the ship wasin bad faith or grossnegligence amounting tomalice,Iwonderhowthe plaintiffs could recover anything over the amount of £2,000 plus perhaps consequential interestand othercharges forthat amount. Finally in my judgment, I find that the defendants are not 10 entitledtoanyamount for their counterclaim. In the result, I give judgment for the plaintiffs as per claim. Counterclaim dismissed. Costsofclaim and counterclaim against the defendants. Judgment as per claim. Counterclaim dismissed. Costsagainst defendants. 16 87