The "Vinalines Pioneer"

• Court: High Court (Singapore)
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 26 October 2015
• Neutral Citation: [2015] SGHC 278
• Citation: [2015] SGHC 278
• Defendant Counsel: Philip Tay (Rajah & Tann Singapore LLP)
• Published date: 03 November 2015
• Plaintiff Counsel: Vivian Ang and Ho Pey Yann (Allen & Gledhill LLP)
• Hearing Date: 07 April 2015,06 March 2015,02 April 2015,20 January 2015,13 July 2015,10 March 2015,27 July 2015,30 September 2015
• Date: 26 October 2015
• Docket Number: ADM No 163 of 2013 (Registrar’s Appeal No 402 of 2014)
• Subject Matter: Admiralty and Shipping,Admiralty Jurisdiction and Arrest,Meaning of "damage done by a ship" under s 3(1)(d) of the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed)

Belinda Ang Saw Ean J: Introduction

The plaintiff, Hung Dao Container Joint Stock Company (“Hung Dao”), is a company incorporated in Vietnam. On 4 June 2013, Hung Dao commenced in rem proceedings in Singapore vide Adm No 153 of 2013 and arrested the vessel, Vinalines Pioneer, on 9 June 2013, for the loss of 111 containers that were on board the Phu Tan that capsized and sank in the Gulf of Tonkin in heavy seas on 16 December 2010. At all material times, the defendant, Vietnam National Shipping Lines, was the owner of the Phu Tan and the Vinalines Pioneer.

This is the defendant’s appeal in Registrar’s Appeal No 402 of 2014 (“RA 402”) which was filed in the wake of the Assistant Registrar’s decision in The Vinalines Pioneer [2015] SGHCR 01 (“the AR’s decision”) dismissing the defendant’s application in Summons No 4029 of 2013 to set aside the in rem writ under O 12 r 7 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the ROC”) or, in the alternative, under O 18 r 19(b), (c) and/or (d) of the ROC.

The facts and arguments are comprehensively stated in the AR’s decision and it is only necessary to give a short summary of them in the course of this judgment. For the purpose of this appeal, the defendant accepted that the contract to lease the bulk of the containers was between Hung Dao and the defendant.

There are three main issues to be resolved in RA 402. The first is the jurisdictional issue, namely, whether Hung Dao’s claim has the legal character described in s 3(1)(d) of the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed) (“the HCAJA”). The second is the striking out issue, namely, whether Hung Dao’s claim is time barred under Vietnamese law. The third issue is on non-disclosure of facts that would materially affect the issue of jurisdiction as well as the overall merits of the case.

Jurisdictional issue: damage done by a ship

The jurisdictional issue in RA 402 is centred on whether Hung Dao’s claim has the legal character described in s 3(1)(d) of the HCAJA. Counsel for Hung Dao, Ms Vivian Ang (“Ms Ang”), argued that the damage which Hung Dao had suffered from the total loss of the 111 containers and the financial consequences arising therefrom was a claim for “damage done by a ship” within the meaning of those words in that paragraph. The Assistant Registrar (“AR”) agreed with Ms Ang that the facts and circumstances giving rise to Hung Dao’s claim for damage done by a ship satisfied the legal character described in s 3(1)(d) of the HCAJA. Preferring Nagrint v The Ship Regis (1939) 61 CLR 688 (“The Regis”) over Berliner Bank AG v C Czarnikow Sugar Ltd (“The Rama”) [1996] 2 Lloyd’s Rep 281 (“The Rama”), the AR opined that a ship which capsized and caused damage to property on board could be considered to be the instrument of damage and that the ship was not to be treated as merely a passive environment where the incident occurred.

Counsel for the defendant, Mr Philip Tay (“Mr Tay”), contended that damage done by a ship in s 3(1)(d) did not extend to loss of all containers on board the carrying vessel, Phu Tan. The AR was wrong to conclude that Clarke J’s externality criterion in The Rama was not needed to satisfy the legal character of s 3(1)(d). Clarke J opined as follows (at 293):

In my judgment, the cases show that to be “damage done by a ship” and thus to qualify as giving rise to a maritime lien three criteria must be satisfied: 1. the damage must be caused by something done by those engaged in the navigation or management of the ship in a physical sense; 2. the ship must be the actual or noxious instrument by which the damage is done; and 3. the damage must be sustained by a person or property external to the ship.

In response, Ms Ang contended that The Rama should not be followed. According to Ms Ang, Clarke J’s third requirement – that “damage done by a ship” applied only to damage done to something external to the ship (ie, the carrying ship) – was not a legal element in the absence of express words in Lord Diplock’s test in The “Eschersheim” [1976] 2 Lloyd’s Rep 1 (“The Eschersheim”) at 8. Ms Ang cited several cases to illustrate her point that the externality criterion was not needed for a maritime claim to fall within the legal character described in s 3(1)(d). The main cases were The Regis, Union Steamship Company of New Zealand v Ferguson (1969) 119 CLR 191 (“Union Steamship”) and Fournier v The Ship “Margaret Z” [1999] 3 NZLR 111 (“The Margaret Z”).

The number of cases cited in argument was not entirely in harmony on Clarke J’s externality criterion. Apart from the cases cited to me, I have looked at, for myself, a number of authorities in a case of this kind. In my view, the weight of authority favours the statement of principle that there is no jurisdiction in rem if the carrying ship (ie, the offending vessel) caused damage to property on board. Clarke J’s third requirement of externality, which is a reflection of English law, should be followed in Singapore. I disagree with the AR’s view that the externality criterion would restrict the ambit of s 3(1)(d) of the HCAJA. He saw no reason why in rem jurisdiction could not attach just because damage occurred on the ship when the latter was the instrument of damage. A point to note is that the AR’s view of s 3(1)(d) serves to extend the ambit of the court’s jurisdiction in rem and the established category of damage lien beyond legal bounds. Let me elaborate on this.

Observations

It is necessary to approach the arguments advanced before me with the following observations in mind. The words “damage done by a ship” were first taken from s 7 of the Admiralty Court Act, 1861 (24 & 25 Vict, c 10) (“the 1861 Act”) which reads:

The High Court of Admiralty shall have jurisdiction over any Claim for Damage done by any Ship.

The same phraseology was repeated in later legislation and then in s 1(1)(d) of the Administration of Justice Act, 1956 (c 46) (UK) (“AJA 1956”) and currently in s 20(2)(e) of the Senior Courts Act 1981 (c 54) (UK) (“SCA”) (formerly known as the UK Supreme Court Act 1981). The AJA 1956 enacted (in part) the 1952 Arrest Convention (ie, International Convention for the Unification of Certain Rules Relating to Arrest of Sea-Going Ships 1952) into English law.

Historically, an action in rem is linked with maritime liens. The long held view was that the right in rem was based on the existence of a maritime lien. Thus, proceedings in rem are available whenever there is a maritime lien attaching to a vessel. The Bold Buccleugh (1852) 7 Moo PC 267 (“The Bold Buccleugh”) articulated the theory of the maritime lien for damage in cases of collision as it existed in England at the time. Claims for collision damage were recognised as giving rise to a maritime lien for damage (also referred to as a “damage lien”). This damage lien was recognised as a claim for injury caused by the ship.

Professor D C Jackson, Enforcement of Maritime Claims (Informa Law, 4th Ed, 2005) at para 2.63 observed that the admiralty jurisdiction based on the occurrence of “damage” is not necessarily equated with existence of a damage lien, and that the courts are not likely to construe the court’s statutory jurisdiction in rem any wider in scope if the subject matter of the claim could also have attracted a damage lien.

Plainly, it cannot be inferred from the court’s statutory jurisdiction in rem that the legislature intended for the statutory lien in question to assume the nature of a maritime lien. The confusion may have been the result of the long held view of The Bold Buccleugh that jurisdiction in rem and maritime liens went hand in hand. This view was later regarded as inaccurate. Put simply, if a maritime lien exists, a statutory lien and jurisdiction in rem is available. However, the converse is not necessarily true. If a statutory lien and jurisdiction in rem are made out, it is not the case that a maritime lien can be inferred (see also D R Thomas, Maritime Liens (Stevens & Sons, 1980) (“Thomas”) at para 43).

I digress to briefly state the legislative history of Singapore’s admiralty jurisdiction. Notably, the 1861 Act was applicable in Singapore prior to 15 January 1962. A V Winslow J in The “Simba” [1968-1970] SLR(R) 555 (“The Simba”) explained the admiralty landscape as follows:

8 [T]he admiralty jurisdiction of the High Court in Singapore arose by virtue of s 17(c) of the Courts Ordinance (Cap 3) which provided it with the jurisdiction and authority of a Colonial Court of Admiralty conferred upon it by the Colonial Courts of Admiralty Act 1890. That jurisdiction and that authority still exist by virtue of s 8(2) of the [Courts (Admiralty Jurisdiction) Ordinance 1961].

9 By virtue of ss 23 and 24 of the Courts of Judicature Act 1964 the High Court in Singapore was invested with the same jurisdiction as was vested in it by any written law immediately prior to Malaysia Day and such jurisdiction includes the jurisdiction and authority in relation to admiralty matters conferred on the High Court of Justice in England under the Administration of Justice Act 1956 …

Therefore, prior to 15 January 1962, the admiralty jurisdiction of the High Court in Singapore was limited to the admiralty jurisdiction which the High Court in England had in 1890 with the enactment of the Colonial Courts Admiralty Act, 1890 (53 & 54 Vict. c 27). The jurisdiction of the High Court of Singapore over claims for damage was to be found: (a) in s 6 of the Admiralty Court Act, 1840 (3 & 4 Vict. c 65) (“the 1840 Act”) where the court’s jurisdiction in rem was over damage “received by any ship or seagoing vessel”, and (b) in s 7 of the 1861 Act which gave jurisdiction in rem over “any claim for “damage done by a ship”. Both the 1840 and 1861 Acts existed concurrently.

The Courts (Admiralty Jurisdiction) Ordinance 1961 (“the Ordinance”) was renamed to the High Court (Admiralty Jurisdiction) Act pursuant...