The "Ocean Jade"

• Jurisdiction: Singapore
• Judgment Date: 27 February 1991
• Date: 27 February 1991
• Docket Number: Admiralty in Rem No 442 of 1990
• Court: High Court (Singapore)

The “Ocean Jade”

[1991] SGHC 33

M Karthigesu J

Admiralty in Rem No 442 of 1990

High Court

Admiralty and Shipping–Admiralty jurisdiction and arrest–Action in rem–Arrest of cargo–Claim for freight, extra expenses and return freight–Sections 3 (1) (h) and 4 (3) High Court (Admiralty Jurisdiction) Act (Cap 123, 1985 Rev Ed)–Admiralty and Shipping–Practice and procedure in action in rem–Judgment in default of appearance–Setting aside of default judgment–Affidavit filed as proof of claim not complying with O 41 rr 5 (1) and 5 (2) The Rules of the Supreme Court 1970–Order 70 rr 20 (3) and 20 (9) The Rules of the Supreme Court 1970–Civil Procedure–Judgments and orders–Judgment in default of appearance–Setting aside of default judgment–Affidavit filed as proof of claim not complying with O 41 rr 5 (1) and 5 (2) The Rules of the Supreme Court 1970–Exercise of court's discretion to set aside default judgment

The plaintiff was the owner of the vessel Ocean Jade which was on a time charter. The defendants were the notify party specified under bills of lading for the cargo of wood pulp to be delivered at Um Qaser/Basrah. After the vessel sailed, the time charterer defaulted on the charterhire. Upon the agreement of various shippers to pay extra freight, except for the shipper of the wood pulp, the plaintiff was prepared to complete the voyage. As the vessel was proceeding to Um Qaser/Basrah, the Gulf War broke out. This was followed by the imposition of economic sanctions against Iraq on 7 August 1990. That same day, the plaintiff directed the vessel to sail for Singapore, and she discharged her cargo there on 28 August 1990. The plaintiff filed the in remwrit on 27 August 1990 and arrested the cargo on 29 August 1990. An application for the appraisal and sale of the cargo pendente lite was made on 30 August 1990, and an order accordingly was obtained on 14 September 1990 (not executed pending decision herein). Judgment in default of appearance was also obtained against the defendants on 5 October 1990. The affidavit leading to the signing of the judgment in default of appearance was made by the plaintiff's solicitor. Order 70 r 20 (3) of The Rules of the Supreme Court 1970 requires the filing of an affidavit verifying the facts on which the action is based. The defendants applied by summons in chambers to set aside all proceedings connected with the plaintiff's action, arguing inter alia that the court lacked jurisdiction and the action was unknown in Singapore.

Held, granting the defendants' application:

(1) The plaintiff could invoke the admiralty jurisdiction of the High Court if the claim fell within ss 3 (1) and 4 of the High Court (Admiralty Jurisdiction) Act (Cap 123, 1985 Rev Ed) (“the Act”). In this case, the plaintiff's claim for freight, extra expenses and return freight and for extra services rendered to cargo could not give rise to a maritime lien on the cargo. The plaintiff had, at best, a possessory lien over the cargo, but this could not amount to a “charge on … property” for the purposes of s 4 (3) of the Act. Thus, the plaintiff had wrongly invoked the admiralty in rem jurisdiction of this court: at [19], [20], [28] to [31].

(2) At this stage, the plaintiff did not have to prove that its claim was sustainable in law so long as the claim was not frivolous or vexatious. However, the words “other charge” in the context in which they appear in s 4 (3) of the Act could not have been meant to have as wide a meaning as “any claim” or “other claim”. Further, nowhere in any of the sections in Pt VII of the Merchant Shipping Act (Cap 179, 1985 Rev Ed) was there to be found words capable of creating a “charge” over the property discharged from a ship and placed in the custody of the wharfinger or warehouseman. All that s 263 of the Merchant Shipping Act did was to preserve the possessory lien for freight notwithstanding the discharge of the cargo from the ship: at [61], [68] and [69].

(3) The plaintiff's and its instructing solicitors' conduct was found to be unacceptable as the defendants were not given any opportunity to negotiate the additional charges the plaintiff was claiming. It is axiomatic that he who comes to equity must come with clean hands. As the plaintiff did not come to the court with clean hands, it must be refused any equitable relief: at [77].

(4) Order 41 rr 5 (1) and 5 (2) of The Rules of the Supreme Court 1970 required that an affidavit contain only such facts as the deponent was able of his own knowledge to prove, unless the affidavit was used in interlocutory proceedings. The only exceptions were applications filed for summary judgment under O 14 of the Rules and when ordered by the court. An application to enter judgment in default of appearance under O 70 r 20 (3) was intended to decide the rights of the parties and accordingly was not an interlocutory proceeding. A judgment entered in default of appearance under O 70 r 20 (3) was a final judgment. As the plaintiff had not properly proven its case, the court had a discretion to set aside a judgment entered under this rule: at [85] to [88].

Acrux, The [1965] P 391; [1965] 2 All ER 323 (folld)

Cargo Ex Argos (1873-74) 5 LRPC 134 (refd)

Conoco Britannia, The [1972] 2 QB 543 (refd)

Fortitude, In re (1843) 2 W Rob 217; 166 ER 736 (refd)

Halcyon Isle, The [1981] AC 221 (folld)

J (an infant), Re [1960] 1 WLR 253; [1960] 1 All ER 603 (folld)

Kaleten, The [1914] 30 TLR 572 (distd)

Place v Potts (1855) 5 HLC 383; 10 ER 948 (refd)

Ripon City, The [1987] P 226 (refd)

Rossage v Rossage [1960] 1 WLR 249; [1960] 1 All ER 600 (folld)

Sextum, The [1982] 2 Lloyd's Rep 532 (folld)

Soon Aik Marine & Engineering Pte Ltd v The Hoesheng [1987] SLR (R) 148; [1987] SLR 247 (refd)

St Elefterio, The [1957] P 179 (folld)

St Merriel, The [1963] P 247; [1963] 1 All ER 537 (folld)

Struan, The1985 (UK) (refd)

Air Navigation Act (Cap 6, 1985 Rev Ed)s 11

High Court (Admiralty Jurisdiction) Act (Cap 123, 1985 Rev Ed)ss 3 (1) (h), 4 (3) (consd);ss 3 (1),4

Merchant Shipping Act (Cap 179, 1985 Rev Ed)Pt VIIss 263, 264,266, 267

Rules of the Supreme Court1970, TheO 70rr 20 (3), 20 (9) (consd);O 14,O 41rr 5 (1),5 (2), 29,30, 31

Administration of Justice Act1920 (c 81) (UK) s 5

Admiralty Court Act1861 (c 26) (UK)

Colonial Courts of Admiralty Act 1890 (c 27) (UK)s 2 (2)

County Courts Admiralty Jurisdiction Amendment Act 1869 (c 51) (UK)

Vice-Admiralty Courts Act1863 (c 24) (UK)

Vice-Admiralty Courts Act Amendment Act 1867 (c 45) (UK) s 17

Rules of the Supreme Court1965 (UK)O 75rr 20 (3), 30,32 (2),32 (7),33

Ajaib Haridass (Haridass Ho & Partners) for the plaintiff

Sin Lye Kuen (Drew & Napier) for the defendant.

M Karthigesu J

1 State Enterprise for Paper Industries of Basrah, Iraq, the owners of cargo lately laden on board the ship or vessel Ocean Jade, the defendants in these admiralty proceedings, claim that this action and all proceedings in this action including the arrest of “the cargo” (which comprised of 21,210 bales of bleached hard wood sulphate pulp and 4,637 rolls of unbleached kraft soft wood pulp) and the whole of the judgment in default of appearance dated 28 September 1990 be struck out or set aside.

2 I should state at the outset that Mr Haridass Ajaib, counsel for the plaintiffs, raised the question whether the defendants being a state corporation of Iraq had a right of audience. I indicated that Singapore was not in a state of war with Iraq. Furthermore, the action in the Gulf was in the nature of policing action undertaken by a coalition of countries under the auspices of the United Nations. The point was not pursued by Mr Haridass Ajaib.

3 The grounds on which the defendants based their claim are stated in the summons in chambers itself under the following heads:

1. (1) that the court has no jurisdiction to entertain or otherwise deal with this action;

2. (2) that the action is unknown to the law of Singapore;

3. (3) that this action is an abuse of the process of the court;

4. (4) that the judgment in default of appearance entered by the plaintiffs, the owners of the Ocean Jade, was obtained improperly and irregularly, in that:

   1. (a) it purports to be based on an action over which the court has no jurisdiction;

   2. (b) it is and was obtained pursuant to an abuse of the process of the court;

   3. (c) the statement of claim was defective in that it:

      1. (i) discloses no or no reasonable cause of action against the cargo;

      2. (ii) is otherwise an abuse of the process of the court;

      3. (iii) that the warrant of arrest was obtained improperly;

      4. (iv) that the affidavit leading to the warrant of arrest was improper and misleading.

4 The Ocean Jade, a Panamanian registered vessel, is owned by Emilia Shipping Inc of Monrovia, Liberia (“the plaintiffs”). The plaintiffs by a time charterparty dated at Hamburg 17 May 1990 chartered the Ocean Jade to Meridian Ship Inc of Baltimore, United States of America (“the charterers”) on a one-time-charter-trip from “US Gulf/Mediterranean/Read Sea (Agaba) to Persian Gulf” of a duration of 70 to 75 days commencing from the time of delivery.

5 One of the shippers of cargo on the Ocean Jade was Pinecell Inc of 14 Maple Street, Port Washington, New York, United States of America (“Pinecell”) to whom was issued a bill of lading dated at New Orleans, 31 May 1990 and signed by the charterers' agents on behalf of the charterers. The bill of lading gave the details of the cargo which was consigned to the order of Rafidain Bank, Baghdad and named the defendants, State Enterprise for Paper Industries, Basrah as the “notify party”. The port of discharge was stated as Um Qaser/Basrah. The bill of lading also stated that freight was prepaid and particulars thereof were given.

6 On or about 9 July 1990 and after the Ocean Jade's voyage under the charterparty had commenced the plaintiffs learnt that the charterers would not make any...