The "Aquarius III"

• Jurisdiction: Singapore
• Judge: Woo Bih Li JC
• Judgment Date: 03 July 2002
• Neutral Citation: [2002] SGHC 138
• Docket Number: Admiralty in Rem No 600360 of 2001 (Notice of Motion No 600038 of 2002)
• Date: 03 July 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: Raymond Ong (Rajah & Tann)
• Citation: [2002] SGHC 138
• Defendant Counsel: Alvin Looi (Gurbani & Co)
• Court: High Court (Singapore)
• Subject Matter: Admiralty and Shipping,Sheriff's expenses,Whether crews' post-arrest wages and disbursement part of sheriff's expenses,Practice and procedure of action in rem,Sale of ship pursuant to arrest

Judgment

GROUNDS OF DECISION

Introduction

1. One Myoe Aung and seven other persons were the Interveners in Admiralty in Rem No 600360 of 2001. They were the crew of ‘AQUARIUS III’ (‘the Vessel’) which had been arrested in Singapore on the application of the Plaintiff Gulf Agency (Singapore) Pte Ltd (‘Gulf Agency’).

2. Gulf Agency was the Vessel’s agent. After the Vessel arrived in Singapore on 9 May 2001, Gulf Agency supplied food, provisions, bunkers and water and was responsible for the port dues. In the meantime, crew’s wages were not paid for several months. The owners had apparently abandoned the Vessel.

3. Although the crew’s wages ranked higher in priority to the claim of Gulf Agency, it was Gulf Agency who arrested the Vessel on 21 September 2001.

4. Gulf Agency then obtained an Order of Court dated 2 November 2001 for the Vessel to be appraised and sold pendente lite. The Order was suspended for ten days to allow the owners an opportunity to satisfy all claims against the Vessel. However, Gulf Agency did not proceed to sell the Vessel upon expiration of the ten day period. The Interveners’ solicitors Gurbani & Co then requested Gulf Agency'’ solicitors to file the Commission for Appraisement and Sale of the Vessel. They said that if this was not done by 15 November 2001, the Interveners would file the same and ask the court for costs of taking over the sale process. Apparently there was no response.

5. On 27 November 2001, Gurbani & Co wrote again to Colin Ng & Partners on the same subject but on an urgent basis. They also asked for a copy of the Order of Court dated 2 November 2001. On 29 November 2001, they wrote a third time and asked for the Order of Court dated 2 November 2001 to be served on them. This time, Colin Ng & Partners replied to say that the Interveners might take whatever action they deemed fit but would first have to apply to intervene in the action as they were not yet formally on record as Interveners.

6. The Interveners then applied for and obtained an Order of Court dated 5 December 2001 to allow them to intervene in the action and to have conduct of the sale of the Vessel.

7. Thereafter, the Sheriff took steps to advertise the Vessel for sale. The advertisement was to appear in the Straits Times on 4 January 2002. However Gurbani & Co requested the Sheriff to abort this advertisement.

8. Colin Ng & Partners were not aware of this development. In mid-January 2002, they made enquiries with the Sheriff’s office. They say that it was then that they discovered that the advertisement had not taken place because the Interveners had received part payment of their wages from the owners.

9. On 21 January 2002, Colin Ng & Partners sent a fax to the owners’ solicitors, copied to Gurbani & Co, giving the owners a final opportunity to satisfy all claims by 28 January 2002 or the advertisement would proceed. Gurbani & Co sent a similar fax on 21 January 2002 to the owners’ solicitors although they had received a second part payment by then.

10. As the owners failed to pay, Gurbani & Co then wrote on 28 January 2002 to the Sheriff to proceed with the advertisement.

11. However, on 29 January 2002, they once again requested the Sheriff to postpone the advertisement so as to give the owners a final opportunity to settle all claims by 8 February 2002. This was because the owners’ solicitors had made a written request for a final extension of time to 8 February 2002 to settle all outstandings.

12. On 30 January 2002, Colin Ng & Partners wrote to the Sheriff. Their fax stated:

‘We refer to M/s Gurbani & Co’s fax of 29 January 2002 and your fax of 30 January 2002.

We were not informed of M/s Gurbani’s intention to delay the sale, and we do not agree to the same.

However, as your good office has exercised the discretion to delay the sale by a week, we respect the same and will abide by it.

Our clients however, reserve their rights to seek reimbursement payment of Sheriff’s expenses from M/s Gurbani’s clients for the one week from 1 February 2002 to 8 February 2002.’

13. Although Colin Ng & Partners took the position that they were not informed of the request by Gurbani & Co, the request was in fact copied to them. What they meant was that they were not given prior notice of the request.

14. On 30 January 2002, the Sheriff wrote to Gurbani & Co to state that the postponement, until 8 February 2002, would be final and the Sheriff would not entertain such requests in future. On the same day, Gurbani & Co replied to agree that no more postponements should be granted thereafter. They also said that if the Sheriff did not hear from them by noon of 11 February 2002, the Sheriff was to proceed with the advertisement.

15. On 18 February 2002, Gurbani & Co followed up by writing to the Sheriff to proceed with the advertisement whereupon the advertisement was eventually effected on 1 March 2002. The advertisement requested bids for the purchase of the Vessel to reach the Sheriff by 15 March 2002. However, no bids were received.

16. On 20 March 2002, the Sheriff wrote to Gurbani & Co requesting for another $3,000 to re-advertise the Vessel. The Sheriff received no response. On 27 March 2002, Colin Ng & Partners wrote to Gurbani & Co to put up the advertisement fees. There was no response.

17. In April 2002, Gulf Agency managed to get a buyer through its own efforts and applied to court to sanction the sale. However the buyer failed to complete the sale.

18. On 2 May 2002, Colin Ng & Partners requested the Sheriff to re-advertise the Vessel for sale since the Interveners did not put up any fresh funds for further advertisements. Gulf Agency also arranged for an advertisement in Lloyd’s List. However, there was no bid except for an offer of $140,000. Gulf Agency then applied for and obtained a Court order to sanction this sale.

19. The price of $140,000 was insufficient to pay port dues and guard charges which ranked in priority to crew’s wages.

20. Hence, the Interveners applied by Notice of Motion for an order that the wages and disbursements of the crew from the date of arrest till the date of repatriation be treated as Sheriff’s expenses and to rank in priority to all other claims.

21. The Interveners’ application also covered the costs of repatriation of the crew and the Interveners’ deposit of $3,000 in respect of an appraisement of the Vessel, and advertisement to sell the Vessel. However, Gulf Agency had taken steps to pay for the repatriation of the crew and did not contest that the $3,000 deposit should be treated as Sheriff’s expenses. Hence, these became non-issues.

22. It was obvious that although the crew’s wages ranked in priority to that of Gulf Agency’s claim, the Interveners would not receive anything from the sale proceeds as such proceeds were not sufficient even to pay port dues and guard charges which in turn ranked in priority as Sheriff’s expenses to the crew’s wages.

23. If, however, the crew’s wages were to be treated as Sheriff’s expenses, then they would be paid either from the sale proceeds or by Gulf Agency under the usual indemnity (from Gulf Agency) to the Sheriff to pay for the Sheriff’s expenses.

Arguments for the Interveners

24. The Interveners’ application was confined to the crew’s wages and disbursements from the date of the arrest of the Vessel and did not include wages and disbursements prior to arrest.

25. Mr Alvin Looi, Counsel for the Interveners, submitted that the equities were such that the post-arrest wages and disbursements should be part of the Sheriff’s expenses because the Sheriff was obliged to preserve and maintain the Vessel from the date of arrest. To do so, the Sheriff was required by law to maintain a minimum number of crew on board the Vessel during the period of arrest.

26. He referred to Regulation 9 of the Maritime and Port Authority of Singapore (Port) Regulations which states:

‘Adequate crew on board

9.(1) The owner, agent, master or person-in-charge of a vessel shall at all times ensure that the vessel is sufficiently and efficiently manned.

(2) The owner, agent, master or person-in-charge of a vessel at anchor shall at all times have on board the vessel a sufficient number of men -

(a) capable of veering cable and keeping anchor lights burning; and

(b) for taking appropriate action in case of an emergency.

(3) The Port Master may, in respect of any vessel or class of vessels, from time to time stipulate the number of men required under paragraph (2).

(4) ….’

27. The Port Marine Circular No 38 of 1998 dated 3 August 1998 states:

‘VESSELS AT ANCHOR IN PORT

1 Pursuant to Regulation 9 of the Maritime and Port Authority of Singapore (Port) Regulations 1997, the owner, agent, master or person-in-charge of every vessel (including harbour/pleasure craft) at anchor in port shall at all times have onboard sufficient number of men capable of veering cable, keeping anchor lights lit and taking appropriate action in case of an emergency.

2 Vessels under active employment/repair must have their full operational crew onboard. In other cases, at least half the number of Officers, Engineers and crew (or Watchmen/Security Guards) or the minimum manning as in Appendix 1, must be onboard at all times.

3 ….

4 ….

5 ….’

28. Appendix 1 provided for a minimum of seven crew for the type of vessel applicable to the Vessel.

Arguments for Gulf Agency

29. Mr Raymond Ong, Counsel for Gulf Agency, did not dispute that a minimum crew had to be retained during the arrest. He also did not dispute that had the Interveners been repatriated earlier, the arresting party would have had to engage a replacement crew and would also have asked for the wages and disbursements of the replacement crew to be part of the Sheriff’s expenses. However he stressed that in the present case, the arresting party had not engaged a replacement crew and there was no order that the Interveners’ post-arrest wages and disbursements be paid as part of...