The "Soeraya Emas"

• Jurisdiction: Singapore
• Judgment Date: 13 September 1991
• Date: 13 September 1991
• Docket Number: Admiralty in Rem No 51 of 1989
• Court: High Court (Singapore)

The “Soeraya Emas”

[1991] SGHC 125

M Karthigesu J

Admiralty in Rem No 51 of 1989

High Court

Admiralty and Shipping–Practice and procedure of action in rem–Intervention–Whether consent order binding on intervener–Whether intervener has locus standito make application–Effect of entering appearance to action in rem–Order 70 r 16 The Rules of the Supreme Court 1970–Civil Procedure–Summary judgment–Consequences of summary judgment in admiralty in rem action–Order 14 r 2 (8) The Rules of the Supreme Court 1970

In 1985 the plaintiff sold the vessel Soeraya Emas to the defendant Perkapalan Emas Sdn Bhd (“PESB”) who then executed a mortgage in the statutory form in the plaintiff's favour to secure payment of the outstanding purchase price and all other moneys and liabilities due to the plaintiff.

On 23 January 1989, the Soeraya Emas was arrested in Admiralty in Rem No 245 of 1988 (“In Rem No 245”) filed by Singapore Slipway & Engineering Co (Pte) Ltd (“SSE”) against PESB. The plaintiff, claiming interest as mortgagees, was given leave to intervene and enter an appearance. There were other interveners. PESB entered an appearance in February 1989 but did not raise any defence when SSE applied for summary judgment. Judgment was duly entered for SSE on 8 April 1989.

While the Soeraya Emas was under arrest, the plaintiff commenced these proceedings, seeking a declaration on the validity of their mortgage and sums due to them under the mortgage, interest and costs. SSE obtained leave to intervene. PESB entered an appearance on 21 March 1989.

On 8 April 1989, the Soeraya Emas was sold pursuant to an order of court obtained by SSE by consent of PESB and interveners in In Rem No 245. On 25 April 1989, the plaintiff applied for summary judgment. At the hearing, PESB consented to judgment without raising any defence. The plaintiff then obtained a court order dated 21 July 1989 declaring the validity of the mortgage and giving them liberty to enter final judgment for the money claim.

One of the interveners who entered an appearance in In Rem No 245 (but who was not a party to the consent order obtained by SSE) was Inter Maritime Sdn Bhd (“Inter Maritime”) who obtained leave to intervene and enter an appearance in these proceedings. They applied to set aside the court order of 21 July 1989 and additionally or alternatively, for a declaration that the court order not be binding on them. The Registrar dismissed both prayers, holding that the court had no jurisdiction to set aside a consent judgment and that Inter Maritime had no locus standi in these proceedings. Inter Maritime appealed.

Held, allowing the appeals:

(1) The O 14 procedure applied to admiralty actionsin rem. Abuses to the use of O 14 proceedings in admiralty actions in rem were minimised by r 2 (8) which provided for affidavits to contain all the necessary evidence in support or in opposition to the claim: at [19] and [41].

(2) By making an appearance, the action continued against PESB as an action in rem and also as an action in personam. In so far as Inter Maritime were concerned, these proceedings were an admiralty actionin rem. In so far as PESB were concerned, by reason of their appearance and consent, they were personally liable to satisfy any judgment entered against them. The court order dated 21 July 1989 therefore only bound the plaintiff and PESB. Inter Maritime did not then enter appearance and could not therefore have consented: at [30] to [32].

(3) Since these proceedings remained an admiralty action in rem vis-à-vis all persons having an interest in the Soeraya Emas, except PESB, the right to intervene was governed by O 70 r 16 of The Rules of the Supreme Court 1970: at [33].

(4) A person given leave to intervene in an admiralty action in rem protected his interest in the property by defending the action in rem. He was permitted to set up such defences which the owners of the ship could have set up had they defended the action. At this stage, the court needed only to be satisfied that the contentions of Inter Maritime had merit, and the court was so satisfied. As such, they had locus standi for if they succeeded in their defences of challenging the validity of the mortgage, their claim would not rank after the plaintiff's claim: at [36] and [38].

(5) On the facts, natural justice also demanded that Inter Maritime be given an opportunity to be heard. They had defences to the plaintiff's claim and should be allowed to raise them. It could not be seen how the plaintiff could thereby be prejudiced: at [40].

Ainsworth v Wilding [1896] 1 Ch 673 (refd)

August 8, The [1983] 2 AC 450 (folld)

Byzantion, The (1922) 16 Asp MLC 19; 127 LT 756 (folld)

Dictator, The [1892] P 304 (folld)

Dowthorpe, The (1843) 2 W Rob 73; 166 ER 682 (folld)

Emeris v Woodward [1889] 43 Ch D 185 (refd)

Eternal Peace, The [1985] 1 Lloyd's Rep 136 (folld)

Gemma, The [1899] P 285 (folld)

Lord Strathcona, The [1925] P 143 (refd)

O Sambaur (No 1), The [1958] MLJ 85 (refd)

O Sambaur (No 2), The [1958] MLJ 87 (refd)

Rules of the Supreme Court1970, TheO 14r 2 (8), O 70r 16 (consd);O 70r 20

Anjali Iyer (Allen & Gledhill) for the interveners/appellant

Lim Hua Yong (Lim Hua Yong) for the plaintiff/respondent.Thomas Tan (Haridass Ho & Partners) for Hang Sing Machinery & Shipping Pte Ltd (intervener).

Judgment reserved.

M Karthigesu J

1 The plaintiffs commenced this admiralty action in rem (to which I shall refer as “these proceedings”) against the “owners of and/or other persons interested in the ship or vessel Soeraya Emas” on 14 February 1989. The plaintiffs' claim as disclosed by the statement of claim endorsed on the writ of summons is as mortgagees of the Soeraya Emas and is as follows.

2 By a memorandum of agreement dated 16 December 1985, the plaintiffs, who are a Malaysian registered company having their registered office at 15th Floor, MUI Plaza, Jalan P Ramlee, Kuala Lumpur, agreed to sell their vessel Kolim Duta (now renamed Soeraya Emas and for convenience referred to hereafter as “Soeraya Emas”) to Perkapalan Emas Sdn Bhd (“Perkapalan Emas”), also a Malaysian registered company having their registered office at Lot 290 (First Floor) Section 10, Jalan Satok, Kuching, Sarawak for RM2.17m of which the sum of RM400,000 referred to as a “deposit” was said to have been paid and receipt acknowledged by the plaintiffs by the said memorandum of agreement. The said memorandum of agreement provided that the balance of the purchase price of RM1.77m was to be paid by way of 42 monthly instalments in the amount and manner provided for in the schedule annexed thereto and forming part thereof. The first of these instalments was to be paid on 15 October 1985 and each subsequent instalment on the 15th of each succeeding month. The said memorandum of agreement provided that the instalment payments were inclusive of interest at the rate of 9.7821% pa flat on the balance sum. There was also a provision that in the event of default in the payment of any one of the said monthly instalments, the plaintiffs would be entitled to demand for the payment of the full outstanding purchase price and that interest at the rate of 1.5% per month would be charged on the amount outstanding to the date of payment (paras 1 and 2 of the statement of claim).

3 The statement of claim further pleaded a collateral deed of covenant also dated 16 December 1985 (“the deed”) made between the plaintiffs and Perkapalan Emas whereby Perkapalan Emas agreed to execute a first priority statutory mortgage of the Soeraya Emas in favour of the plaintiffs to secure the payment of the outstanding purchase price and all other moneys and liabilities covenanted to be paid by Perkapalan Emas to the plaintiffs. The deed provided, inter alia, that in the event the Soeraya Emas was arrested, seized or taken possession of by any court and was not released from such arrest or seizure within seven days or in the event Perkapalan Emas shall default in the payment of any one of the said monthly instalments, the full outstanding purchase price together with interest thereon and all other moneys thereby secured shall become immediately due and payable; the plaintiffs shall forthwith be entitled to enforce and exercise all the powers and remedies as mortgagees of the Soeraya Emas; and the plaintiffs may sell the Soeraya Emas for such price or consideration and on such terms as the plaintiffs shall in their discretion determine (paras 3 and 4 of the statement of claim).

4 By para 5 of the statement of claim, the plaintiffs averred that Perkapalan Emas duly executed and registered the said first priority statutory mortgage over the Soeraya Emas at the port of registry of Port Kelang, Malaysia. The date of execution and the date of registration of the first priority statutory mortgage was not given in the statement of claim. However, from the documents subsequently filed in these proceedings it appears that the plaintiffs executed a bill of sale of the Soeraya Emas, under its former name of Kolim Duta in favour of Perkapalan Emas on 8 October 1985. Perkapalan Emas then executed a mortgage in the statutory form, also on 8 October 1985, but this was not registered at the then port of registry of Port Kelang until 18 December 1985 and eventually transferred to the new port of registry of the Soeraya Emas, namely, Kuching on 26 October...