Dauphin Offshore Engineering & Trading Pte Ltd Inc v Owners of the Vessel Capricorn

• Judge: S Rajendran J
• Judgment Date: 06 November 1998
• Neutral Citation: [1998] SGHC 366
• Citation: [1998] SGHC 366
• Defendant Counsel: Lim Tean and AJ Ramachandran (Rajah & Tann) as amicus curiae,Appadurai s/o Shunmugam and Mark Ortega (Haridass Ho & Pnrs); Lim Tean and AJ Ramachandran (Rajah & Tann)
• Published date: 19 September 2003
• Plaintiff Counsel: Goon Hoong Seng and Joseph Chellappan (Low Yeap Toh & Goon)
• Date: 06 November 1998
• Docket Number: Admiralty in Rem No 735 of 1993
• Court: High Court (Singapore)
• Subject Matter: Action in rem,Owner of vessel wound up after entering appearance to in rem action and in personam action,Effect of arrest in admiralty,Admiralty jurisdiction and arrest,Whether proceeding only with in rem action allowed,Effect of failure,Failure to plead foreign law on dissolution,Admiralty and Shipping,Distinction between in rem and in personam action

Judgment:

S RAJENDRAN J

This is a claim by the plaintiffs against the owners of the vessel `Capricorn` in respect of works and services performed by them on the said vessel. At the time of the issue of the writ (in November 1993) Valour Offshore Marine Services NV (`Valour NV`) were the owners of the vessel. Valour NV entered appearance and subsequently filed its defence. The vessel was released after its arrest upon security procured by Valour NV.

2.The plaintiffs, in carrying out work on the vessel, took instructions from one Kuo Fen Ching (`Kuo`). In his affidavit evidence-in-chief filed on 22 November 1996, Kuo stated that he was a director of Valour NV and was authorised to make the affidavit on behalf of the defendants. He also described himself as a director of Valour Offshore Marine Services Pte Ltd (`Valour Singapore`), which company he described as the present registered owner of the `Capricorn`. The hearing of the action commenced on 3 March 1998 and continued to 6 March 1998 when it was adjourned for further dates of hearing to be fixed. During the hearing Kuo was present in court as the representative of Valour NV.

3.On 17 July 1998, three days before the commencement of the resumed hearing, the solicitors for Valour NV sent an urgent letter to the Registrar. It read as follows:

We refer to the abovecaptioned matter, the resumption of the trial of which is to take place from 20 to 24 July 1998 before the Honourable Justice Rajendran.

We are on record as the solicitors for the defendants. It came to our attention yesterday that the defendants in this matter, Valour Offshore Marine Services NV, were wound up some time in September 1995. We understand that the company no longer exists as an entity. We were not the solicitors on record at that time as we took over conduct of this matter only on 4 April 1998 from Messrs Haridass Ho & Partners. We have written to the relevant body in the Netherland Antilles where the defendants were incorporated, asking for copies of the relevant documents showing that the company has been wound up. Once we receive it, we shall bring it to the attention of the court.

In view of the matters that has just come to our attention, it is clear that we have no authority to represent the defendants in these proceedings. Enquiries will have to be made by us as to who should give us instructions from now on. As such, at the hearing on 20 July 1998, we shall have to ask the court for an adjournment so that the legal position can be clarified ...

On the morning of the resumed hearing Mr Lim Tean (whose firm had, in April 1998, taken over the conduct of the defence from M/s Haridass Ho & Pnrs) referred the court to a declaration by the Head of the Curacao Commercial Register that Valour NV was dissolved and liquidated on 20 September 1995. He submitted that as Valour NV no longer existed judgment against Valour NV could not be entered. He further submitted that as the vessel had been released on a guarantee provided to the plaintiffs by Citibank, Citibank should be informed of these proceedings and invited to intervene.

4.Mr Lim sought an adjournment of the proceedings to notify Citibank of the situation and ascertain whether Citibank wished to intervene. I granted Mr Lim a 2-day adjournment for him to get in touch with Citibank. On 22 July 1998, Mr Lim informed the court that he had communicated with Citibank and had been told that Citibank did not wish to intervene. Mr Lim then applied to have himself discharged from further acting in the matter on the grounds that as his `clients` did not exist he had no one from whom to take instructions. I granted this application.

5.Counsel for the plaintiffs, Mr Goon Hoong Seng, submitted that as this action was both in rem and in personam, the only effect that the dissolution of Valour NV could have was on the action in personam. He informed the court that if, in fact, Valour NV had ceased to exist, his clients would not pursue with their claim in personam against Valour NV but would only proceed on their claim in rem. He further submitted that as the court had already heard the evidence of the two principal witnesses of the plaintiffs and as there was no party in court to cross-examine the remaining witnesses or present any defence, the court should take the contents of those affidavits into account and grant judgment in rem in favour of the plaintiffs and dismiss the counterclaim.

6.Mr Lim had obviously come to court prepared to argue that because of the dissolution of Valour NV even judgment in rem could not be entered in favour of the plaintiffs. I therefore invited Mr Lim to address the court as amicus and he readily agreed. Mr Lim submitted that in an action in rem, when the owner of a vessel entered appearance and thereby assumed personal liability, the owner became the defendant not only in respect of that personal liability but also in respect of the proceedings in rem. He submitted further that as the defendant in this case had ceased to exist, the proceedings, both in rem and in personam, could not continue. In support of this submission, Mr Lim quoted the cases of The Kusu Island [1989] SLR 119 [1989] 3 MLJ 257 , The Indian Grace [1998] 1 Lloyd`s Rep 1 and Lazard Brothers & Co v Midland Bank Ltd [1933] AC 289.

7.In The Kusu Island , the plaintiffs had amended the writ by adding two sister ships to a writ in rem after the time bar had accrued. The defendants objected to the amendment. One of the arguments raised by the defendants was that by adding the two sister ships, what the plaintiffs had done was to add two new defendants to the action and that since the claim against these two defendants were barred by reason of the expiry of the period of limitation, the amendment ought not to be allowed.

8.Although the Court of Appeal in The Kusu Island disallowed the amendments (on other grounds), it rejected the submission that by adding the two sister ships to the writ the plaintiffs were adding two new defendants to the action. In this context, Wee Chong Jin CJ, in delivering the judgment of the court, said (p 261):

It is clear to us that all the cases relied upon by counsel for the appellants do not really support his contention that in an admiralty action in rem the defendant is the res itself and not the owner of or party interested in the res. On the contrary, there are authorities to the effect that even in an action in rem against the res, the party that is impleaded is the owner of the res.

And at p 262, the Chief Justice continued:

These authorities show that a defendant in an action in rem is as much impleaded as by an action in personam and that the actual defendant is not the res but the owner of or party interested in the res. We therefore reject the argument of counsel for the appellant and agree entirely with the view of the learned judge that it is fallacious that a new defendant was added or introduced by the amendment to the writ.

A similar position was adopted by the House of Lords in The Indian Grace where Lord Steyn said at p 8:

Confining myself to the more important decisions only, there are other decisions of high authority for the proposition that the true defendant in a duly constituted action in rem are the owners of the ship. In The August 8 [1983] 1 Lloyd`s Rep 351 at p 355, col 1; [1983] 2 AC 450 at p 456A-B, Lord Brandon of Oakbrook, a former Admiralty Judge, explained:

`... By the law of England, once a defendant in an admiralty action in rem has entered an appearance in such action, he has submitted himself personally to the jurisdiction of the English admiralty court, and the result of that is that, from then on, the action continues against him not only as an action in rem but also as an action in personam ... [My emphasis.]`

I accept the submission of Mr Lim, on the basis of the two authorities cited, that when the owner of a vessel enters appearance in an admiralty action in rem, the owner is effectively the defendant in respect of the action in rem as well as the action in personam.

9.It is, however, relevant to note that although in such an event the effective defendant is the owner of the vessel, the two proceedings - in rem against the vessel and in personam...