The "Halcyon Isle"

• Jurisdiction: Singapore
• Judge: Chua F A J
• Judgment Date: 08 December 1977
• Neutral Citation: [1977] SGCA 13
• Docket Number: Civil Appeals Nos 6 and 7
• Date: 08 December 1977
• Published date: 19 September 2003
• Year: 1977
• Plaintiff Counsel: Richard Stone QC and Raj Kumar (Donaldson & Burkinshaw)
• Citation: [1977] SGCA 13
• Defendant Counsel: Michael Thomas QC and Loh Boon Huat (Allen & Gledhill)
• Court: Court of Appeal (Singapore)
• Subject Matter: Maritime lien,Practice and procedure of action in rem,Conflict of Laws,Admiralty and Shipping,Whether holder of maritime lien ranks above mortgagee of ship,Singapore court's application of American law,Priorities,Whether ship-repairers could claim priority over mortgages,Priority,Lex fori,Nature of maritime lien,s 4(3) High Court (Admiralty Jurisdiction) Act (Cap 6, 1970 Ed),Choice of law,Property,Ship-repairers were holders of maritime lien under US law,Several claims against proceeds of sale of mortgaged ship

Todd Shipyards Corp, an American corporation, pursuant to a contract entered into in New York executed repairs and supplied materials at their repair yard at Brooklyn, New York, USA in March 1974 to the ship Halcyon Isle, a British ship. They sued the owners of the ship in the High Court in Admiralty in Rem No 150 of 1974 issued on 24 August 1974 claiming $237,011 as remaining due and owing to them in respect of the said repairs. They contend that under American law they are entitled to a maritime lien on the ship in respect of their claim for repairs. They contend that their maritime lien on the ship confers upon them rights of the same nature and quality as is conferred upon the holder of a maritime lien under the law of Singapore and that they are entitled to and/or have a maritime lien in respect of their claim within the meaning of s 4(3) of the High Court (Admiralty Jurisdiction) Act (Cap 6, 1970 Ed).

Bankers Trust International Ltd, an English company, had a first mortgage dated 1 March 1973 registered in London on 8 May 1974 in respect of the ship. They sued the owners of the ship in the High Court in Admiralty in Rem No 151 of 1974 issued on 28 August 1974 claiming $14,413,000 as due and owing on the said mortgage. In September 1974 the ship while in Singapore waters was arrested by the mortgagees and pursuant to an order of the High Court was eventually sold for $1,380,000 in February 1975 and the proceeds of sale were paid into court. The mortgagees obtained judgment on their claim for $14,413,000 also in February 1975.

In July 1974 Todd Shipyards Corp (the ship repairers) moved the High Court for, inter alia, the following orders:

(1) A declaration that the plaintiffs are entitled to and/or have a maritime lien in respect of their claim against the Halcyon Isle within the meaning of s 4(3) of the High Court (Admiralty Jurisdiction) Act (Cap 6 of the Revised Edition (1970)).

(2) That judgment be entered for the plaintiffs in the sum of $237,011 being the equivalent of US$95,569 together with interest thereon at the rate of 8% per annum from the 1 August 1974 to date of judgment or at such other rate and for such other period as to this honourable court seems just.

The mortgagees intervened in that application and the prayer for a declaration was adjourned but the court gave judgment in favour of the ship repairers for $237,011. Subsequently the mortgagees moved the High Court to determine the priority of payments to the several claimants against the proceeds of sale of the ship. The only claimants claiming priority as against the mortgagees were the ship repairers who contend they have a maritime lien on the ship.

The High Court heard the mortgagee`s motion and the adjourned motion of the ship repairers for a declaration at the same time and dismissed the ship repairers` claim for the declaration they sought and held that the mortgagees were entitled to rank before the ship repairers to payment of the proceeds of sale.

The ship repairers now appeal and the sole question in the two appeals is whether or not in a Singapore court the claim of the ship repairers for repairs executed in New York has priority as against the proceeds of sale of the ship over the claim of the mortgagees of the ship. It is not in dispute that under the law of Singapore the claim of a mortgagee has priority as against the proceeds of sale of a ship over the claim of a ship repairer for repairs executed in Singapore and that under the law of Singapore ship repairers do not have a maritime lien on a ship for repairs executed in Singapore. It is also not in dispute that a claimant who has a maritime lien under the law of Singapore has priority over a mortgagee claimant.

The foundation of the ship repairers` claim that they are entitled to priority over the mortgagees is that by American law they have acquired a maritime lien on the ship and that the law of Singapore will recognize and enforce their maritime lien in determining the priority of payments of competing claimants. Their argument is that a maritime lien is a substantive right in a ship attaching at the time the cause of action arose and not defeated by a subsequent bona fide purchaser without notice. It being a substantive right in the ship the law of Singapore recognizes that right and enforces it when determining the priorities of competing claimants to the proceeds of sale of the ship.

The mortgagees accept that the ship repairers under American law have a maritime lien but contend that by the law of Singapore a maritime lien is not a substantive right in a ship but is merely a remedial right entitling certain creditors to seize a ship with the aid of the Admiralty court process and compel its sale regardless of ownership. They say foreign law will be admitted only when the nature of the claim asserted is not known to the court in order to enable the court to identify the nature of the claim to decide whether or not to accept jurisdiction, what remedy is appropriate and how to fit the claim into the order of priorities. They say that the nature of the ship repairers` claim in the present case is a claim for repairs carried out to a ship which is a claim well known to the court and that the ship repairers in electing to invoke the jurisdiction of a Singapore court are only entitled to avail themselves of the remedies given by the lex fori. They say that the nature of the claim being a claim for repairs carried out to a ship the court has jurisdiction to hear and determine such a claim and in fact has given judgment in favour of the ship repairers on their claim for repairs but in determining priorities the court will apply the lex fori only and will disregard the position under American law.

The nature of a maritime lien is dealt with exhaustively by Scott LJ in The Tolten [1946] P 135. At p 144 he said:

The maritime lien is one of the first principles of the law of the sea, and very far-reaching in its effects. In the Bold Buccleugh,Sir John Jervis delivering the judgment of the Privy Council, said this: `Having its origin in this rule of the civil law, a maritime lien is well defined by Lord Tenterden, to mean a claim or privilege upon a thing to be carried into effect by legal process; and Mr Story J (I Sumner, 78) explains that process to be a proceeding in rem, and adds, that wherever a lien or claim is given upon the thing, then the Admiralty enforces it by a proceeding in rem, and indeed is the only court competent to enforce it. A maritime lien is the foundation of the proceeding in rem, a process to make perfect a right inchoate from the moment the lien attaches.` The learned judge in that judgment added an obiter dictum which was subsequently disapproved; but that error does not touch the passage I

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