Simon v Talyor and Others

• Jurisdiction: Singapore
• Judge: Chua F A J
• Judgment Date: 24 October 1974
• Neutral Citation: [1974] SGHC 14
• Date: 24 October 1974
• Subject Matter: Divers recovering mercury from submarine,Submarine belonging to German State sunk in international waters,Divers found submarine and and recovered mercury,Whether German State continued by Federal German Republic,Whether commander and crew abandoned submarine and mercury,Federal Republic of Germany claimed ownership of mercury,Wreck,Whether divers entitled to salvage reward,Admiralty and Shipping,Property of foreign power,Whether submarine and mercury res nullius,Salvage,International Law,Whether divers rendered salvage service,Whether submarine and mercury res derelicta,German submarine with cargo of mercury sunk in 1944 in international waters,State succession
• Docket Number: Originating Summons No 43 of 1973
• Published date: 19 September 2003
• Defendant Counsel: Dr Thio Siu Mien (Chor Pee & Hin Hiong),S Santhiran (Braddell Bros)
• Court: High Court (Singapore)
• Plaintiff Counsel: M Karthigesu and S Selvadurai (Allen & Gledhill)

In March 1972, representations were made by the embassy of the Federal Republic of Germany that some of the mercury recovered from the German submarine U 859, which sank during the second world war in 1944 and which was lying at the bottom of the high seas in the Straits of Malacca, approximately 25 miles north of the island of Penang, was brought into Singapore and that the Federal Republic of Germany claimed ownership of the mercury.

The Receiver of Wreck caused an investigation to be made and it was ascertained from Contract Services Ltd that about 31/2 tons of mercury from the U 859 was brought into Singapore. Whereupon the Receiver of Wreck requested Contract Services Ltd to deliver the mercury to him which was done in April 1972.

The Receiver of Wreck, having taken possession of the mercury, caused a notice in accordance with s 314 of the Merchant Shipping Act to be posted at the office of the Director of Marine on 20 April 1972.

Claims to the ownership and/or a lien of the mercury were made by (1) the German Embassy on behalf of its government; (2) Contract Services Ltd and Evermore Marine Technical Services (Pte) Ltd jointly; (3) G J Taylor, HR Leishman J, CW Bastian and AS Dickie jointly.

In July 1972, the Germany Embassy informed the Singapore government that the government of the Federal Republic of Germany has transferred its right to ownership of the submarine U 859 and its cargo, including the mercury, to Hans L Simon. In the same month Hans L Simon wrote to the Receiver of Wreck claiming ownership of the mercury.

In February 1973 the Attorney General on behalf of the Receiver of Wreck applied to the court for relief by way of interpleader and the claimants were named defendants.

By an order of court dated 26 February 1973, it was ordered that the defendants proceed to trial in the High Court of an issue in which Hans L Simon shall be the plaintiff and the other claimants shall be the defendants, the issue being, which of the parties is entitled to the ownership/lien/possession of the mercury.

The following facts emerged from the evidence. The German submarine U 859 was sunk in 1944 in the Straits of Malacca off Penang by a British submarine and is now lying at the bottom of the sea in international waters. There were few survivors.

The Associated Salvage Sdn Bhd (hereinafter referred to as the ASSB) was a company registered in Malaysia and had its registered office at Kuala Lumpur. The main business of the ASSB was to recover scrap metal from any underwater obstruction, sunken vessels or wrecks. Early in January 1969 the divers of the ASSB located a sunken submarine. At that time the identity of the submarine could not be established but later it turned out to be the U 859. Leishman, the second defendant, was one of the divers who found the U 859.

In March 1969, an agreement (exh D1) was entered into between the ASSB and the government of Malaysia whereby the ASSB purchased the interest of the government of Malaysia in this sunken submarine.

When it was later ascertained that the sunken submarine was the U 859 and that it was lying in international waters the Federal Republic of Germany (hereinafter referred to as the FRG) laid claim to it.

On 10 December 1970, the German Embassy in Kuala Lumpur acting on behalf of the FRG entered into an agreement with the ASSB (AB 43B - hereinafter referred to as the ASSB agreement) whereby the FRG agreed `to the lifting and appropriation of the wreck and cargo of U 859` by the ASSB provided that the ASSB fulfilled certain conditions.

Before any salvage work was carried out the ASSB went into liquidation in March 1971, and the services of Leishman were terminated.

Leishman then left Malaysia and went to work in Brunei for Deep Sea Divers but he did not give up the idea of salvaging the U 859. He continued to work in his spare time on the salvage plan. He then met Dickie, the fourth defendant, who was also working for Deep Sea Divers in Brunei. They continued to work on the salvage plan and later Taylor and Bastian, the first defendant and the third defendant, became interested in tackling the salvage project.

Around October 1971, all these four divers left Deep Sea Divers and they returned to Malaya. They decided to salvage the U 859. They had insufficient funds and they approached Richard Roe, a director of Evermore Marine Technical Services (Pte) Ltd (the sixth defendant) for finance. A sum of $100,000 was promised and on the strength of this promise the four divers purchased diving equipment and the sixth defendant chartered a vessel and they sailed for Penang at the beginning of January 1972. It took them three days to locate the U 859.

While salvage operations were going on they experienced some difficulty in getting the money from Roe. Leishman and another diver came to Singapore to sort things out.

The sixth defendant paid the bills for the diving equipment amounting to $35,000. Leishman later learnt that the $35,000 were not paid by the sixth defendant but by Contract Services Ltd the fifth defendant. A further sum of $20,000 was given by the fifth defendant to the four divers for which they signed a note of acknowledgment whereby they (1) undertake jointly and severally to repay the $20,000; (2) agree to assign all their rights to such quantity of mercury as might be recovered and (3) agree that the said mercury be sold or disposed off in any manner the sixth defendant thought fit to secure the repayment of the said loan (AB 206 and AB 208).

A total of 12 tons of mercury were recovered from the U 859. 31/2 tons of the mercury were brought to Singapore towards the end of January 1972 and delivered to the fifth defendant and 81/2 tons of the mercury were brought to Penang on 3 March 1972, and left with the Receiver of Wreck, Malaysia.

After this the four divers went to Kuala Lumpur to seek further financial assistance to carry on the salvage work as there was more mercury in the U 859.

While the salvage operation was being carried out by the four divers, certain events took place in West Germany. Hans L Simon, the plaintiff is a commercial salvage operator living in West Germany. Sometime in 1972 Simon was approached by the FRG regarding the raising of the U 859. He was asked if he would go to Malaysia to investigate the matter and take over the ASSB agreement.

Simon came to Malaysia in March 1972, and he learnt that the four divers had recovered mercury from the U 859. Simon met the four divers in Kuala Lumpur and after several meetings they came to an agreement and on 26 March 1972, an agreement (exh D 15) was entered between The Compagnie International de Renflourment SA of Luxembourg (hereinafter referred to as the CIR) and the four divers. This agreement was signed by Simon as Director of the CIR. This agreement was `to become valid if and when Bonn agrees to the proposed alteration of the existing agreement between the Federal Republic of Germany and Associated Salvage Sdn Bhd`. In this agreement the CIR was described as `owner of the salvage rights to the wreck of the German U Boat 859`. By this agreement the four divers `undertakes the salvaging of cargo and other matters out of the wreck and if commercially sound the refloating and salvage of the hull and portions thereof`. It was agreed that the four divers were to get 35% of net value recovered from the sale of the salvaged material.

On 19 April 1972 the CIR and the four divers entered into another agreement (AB 4A hereinafter referred to as the CIR agreement). This agreement was also signed by Simon on behalf of the CIR. In the recital it was stated that the FRG claimed title to the wreck and had by the ASSB agreement granted the ASSB the salvage rights thereto and that the ASSB had transferred its rights and obligations under the ASSB agreement to the CIR. It was agreed inter alia, that (1) `the parties hereto shall constitute a syndicate under the name of U 859 for the purpose of salvaging the wreck and selling the same and if commercially sound the refloating of the hull and portions...