Treasure Valley Group Ltd v Saputra Teddy and Another (Ultramarine Holdings Ltd, intervener)

JudgeBelinda Ang Saw Ean J
Judgment Date21 November 2005
Neutral Citation[2005] SGHC 217
Citation[2005] SGHC 217
Defendant CounselLawrence Teh, Andrea Chee and Sun Ru-Shi (Rodyk and Davidson)
Published date28 November 2005
Plaintiff CounselLim Tean and Kendall Tan (Rajah and Tann)
Date21 November 2005
Docket NumberAdmiralty in Rem No 211 of 2004 (Registrar's Appeal No 96 of 2005)
CourtHigh Court (Singapore)
Subject MatterAdmiralty jurisdiction and arrest,Application to set aside arrest of vessel,Defendants not objecting to sale of ship pursuant to arrest but objecting to arrest of ship,Whether defendants' inconsistent conduct amounting to approbation and reprobation of arrest,Defendants granted liberty to treat crew wages as part of Sheriff's expenses,Admiralty and Shipping,Whether doctrine of approbation and reprobation applicable as grounds to dismiss defendants' application to set aside arrest,Whether defendants allowed to claim for damages for wrongful arrest without setting aside arrest

21 November 2005

Judgment reserved.

Belinda Ang Saw Ean J:

1 The plaintiff in this in rem action for possession is Treasure Valley Group Limited. The claim is against persons having possession of the Seeker I, namely, the master of the Seeker I and/or Michael Hatcher (“Capt Hatcher”). Teddy Saputra entered an appearance as the master of the Seeker I and he is the first defendant. Capt Hatcher is the second defendant. Ultramarine Holdings Limited (“Ultramarine”) is the intervener.

2 The Seeker I was arrested on 25 October 2004. An application to set aside the arrest was made on 15 December 2004 on behalf of Capt Hatcher and Ultramarine. The assistant registrar on 12 April 2005 refused to set aside the arrest based upon the alleged non-disclosure of material facts. An appeal against the assistant registrar’s decision was filed on 21 April 2005.

3 The second defendant is none other than the well-known salvor of acclaimed recoveries such as the Nanking cargo and later the Teksing cargo. Capt Hatcher is a professional salvor of ancient wrecks, the contents of which are of great interest not only to salvors but also to marine archeologists and others. It is said that there are many ancient wrecks lying in South-East Asian waters. Modern methods of diving have made the recovery of artefacts and other articles of interest and value from long submerged wrecks a practical proposition.

4 United Sub-Sea Services International Limited (“USSSIL”), a New Zealand-incorporated company, entered into principally two marine salvage agreements with Capt Hatcher and PT United Sub-Sea Services Indonesia (“PTUSSI”), a company with which Capt Hatcher is associated. Borwick International Limited (“Borwick”) is a British Virgin Islands company owned by Capt Hatcher and through which the latter operates. The first marine salvage agreement was dated 13 September 2001 and it was between USSSIL, United Sub-Sea Services Limited (“USSL”) and Capt Hatcher. USSL is a British Virgin Islands company in which Capt Hatcher was a director and shareholder. That agreement was varied twice. The second marine salvage agreement was dated 22 June 2002. According to Capt Hatcher, this latest agreement was intended to substitute USSL as a contracting party with PTUSSI. The involvement of USSL in 2001 and beyond in the marine salvage agreements is curious as Capt Hatcher had deposed that USSL ceased functioning sometime after 1998. Be that as it may, under the 22 June 2002 agreement, Capt Hatcher was to lead expeditions to locate wrecks and salvage their cargoes. PTUSSI was to obtain the necessary licences for the survey and salvage. It is to be noted that the Seeker I is a specialised survey and salvage support vessel. USSSIL was to secure financial funding for the expeditions. It was to raise US$2m and to contribute such sums to meet the costs of the expeditions. As between Capt Hatcher/PTUSSI and USSSIL, their respective share of the proceeds from the sale of successful recoveries was to be 30:70 respectively. It transpired that a Japanese investor, Masuo Saeki, through Ultramarine, acquired a 40% interest in the shareholdings of USSSIL for US$40m.

5 Counsel for Capt Hatcher and Ultramarine, Mr Lawrence Teh, assisted by Ms Andrea Chee, submits that the plaintiff’s allegations in the affidavit leading the Warrant of Arrest were designed to procure the arrest of the Seeker I through the pretence that the plaintiff was the outright owner of the vessel and was keen to regain possession of the vessel that:

(a) was sailing under the command of an errant master, Capt Hatcher, who was countermanding the plaintiff’s orders;

(b) was at one time sailing without a master; and

(c) was at risk of being seized by Indonesian authorities because of the illegal exploits of Capt Hatcher as the master of the Seeker I.

Had the duty registrar been fully apprised of the true state of affairs, Mr Teh contends, Capt Hatcher would have been viewed in a different light. It was possible in those circumstances that the duty registrar might have refused to issue the Warrant of Arrest of the Seeker I. Two broad propositions encompass the basis of the challenge. First, the arrest itself was entirely made on a false premise given the inaccurate statements which the plaintiff ought to have known were incorrect. The arrest was plainly actuated by malice. The second alternative proposition is that there had been material non-disclosure of facts. Some of those material facts could and should have been ascertained by the plaintiff through proper inquiry.

6 The issues of bad faith and, at the very least, non-disclosure of material facts were initially limited to three areas. One area of complaint was the plaintiff’s allegation that Capt Hatcher was the master of the Seeker I. That assertion, Mr Teh argues, is false. The master of the vessel was at all material times Teddy Saputra, the first defendant. The plaintiff either knew that Capt Hatcher was not the master of the vessel or had failed to conduct a proper inquiry into the identity of the master of the vessel and was reckless in identifying Capt Hatcher as the master. Another area was the alleged use and deployment of the vessel in illegal activities, thereby putting her at risk of being seized by the Indonesian authorities. That allegation is again said to be false. The vessel, on the contrary, was covered by survey licences and was not being deployed illegally for surveys, nor was the vessel at risk of being seized by the Indonesian authorities. There is no evidence that the Seeker I was at risk of being seized by the Indonesian authorities. It was a case of Capt Hatcher’s e-mail of 17 October 2004 being given a mischievous reading. The vessel was never deployed illegally. The vessel had permission from the Indonesian Navy to conduct surveys. The issue was simply a matter of delay in securing salvage licences. Finally, as to the allegation that the plaintiff was the registered legal and beneficial owner of the Seeker I, that is again said to be untrue. At the time of the arrest, the Seeker I was only provisionally registered in the name of the plaintiff and this sort of registration, Mr Teh submits, is not testimony of legal and beneficial ownership of the vessel.

7 According to Capt Hatcher, the Seeker I was purchased using funds of or procured by USSSIL and, on his advice, ownership of the vessel was registered in the name of a single-purpose company, Delta Pacific Consultants Limited (“Delta”). As at 3 November 2004, Delta was still the registered owner of the Seeker I. The sole director and shareholder of Delta was one Victor Tan Kim Chye (“Victor Tan”), who held the single share in Delta on trust for USSSIL. Both Capt Hatcher and Ultramarine regard “USSSIL as the beneficial owner of the [Seeker I] or at the least a substantial part of the vessel”. On that latter alternative stance, there is no mention as to who the other co-owner of the Seeker I might be. If it is the plaintiff, then this alternative stance runs counter to their other assertion that the Seeker I was only mortgaged to the plaintiff.

8 Counsel for the plaintiff, Mr Lim Tean, assisted by Mr Kendall Tan, submits that none of the matters raised by Mr Teh, whether considered in isolation or viewed together, demonstrated any bad faith or material non-disclosure. The matters complained about could not conceivably have affected the duty registrar’s decision to issue the Warrant of Arrest.

9 Lawrence Phillips, a director of USSSIL, in his affidavit of 26 January 2005 deposed on behalf of USSSIL, denied that the company had any ownership rights in the Seeker I. He maintained that the purchase of the Seeker I was not funded by USSSIL. USSSIL was to provide working funds to meet the operational expenses for the salvage work.

10 It is the plaintiff’s case that Delta executed a bill of sale and acceptance of sale for the vessel in the plaintiff’s favour on or about 28 September 2004. On the same date, Victor Tan executed a declaration of trust whereby he confirmed that he was holding the single share in Delta on trust for the plaintiff. At the time of the arrest, the plaintiff was named in the Provisional Registration Certificate (“Provisional Patente”) issued on 20 October 2004 as the owner of the Seeker I. Registration of the vessel with the Panamanian ship registry was finalised on 28 January 2005.

11 Both sides engaged Panamanian lawyers for an opinion on the ownership status of a holder of a Provisional Patente. The expert used by Mr Teh said that provisional registration of the vessel with the Panamanian ship registry permits the vessel to fly the Panamanian flag. That means the Seeker I could use the Provisional Patente, which named the plaintiff as owner, to sail in and out of ports like Singapore as a Panamanian-flagged vessel. Mr Lim relies on the crew list submitted by Teddy Saputra, to Singapore Immigration, naming the plaintiff as owner of the Seeker I. In contending that the plaintiff was the “sole registered” owner, the plaintiff was asserting that all 64 out of 64 shares in the vessel were registered in the name of the plaintiff, there being no registered part-owner unlike the facts in The New Draper (1802) 4 C Rob 287; 165 ER 615, an authority cited by Mr Lim in respect of a claim for possession.

12 Gray Clare filed two affidavits on behalf of the plaintiff. It appears from his first affidavit that Gibraltar Group Limited (“Gibraltar”) and an entity which he identified as “Paramount” purchased some units in the Hatcher Unit Trust which he says was ostensibly to take up to 10% of the net proceeds realised from the exploitation of artefacts recovered from shipwrecks pursuant to the marine salvage agreements referred to in [4] above. The Hatcher Unit Trust is an unregistered managed investment scheme allegedly set up to raise money from the public to fund the recovery of sunken treasure from shipwrecks located in South-East Asia. The scheme...

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