Evpo Agnic, The (Skipper I)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE BUTLER-SLOSS,IR ROUALEYN CUMMING-BRUCE |
| Judgment Date | 14 July 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J0714-4 |
| Docket Number | 88/0617 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 July 1988 |
[1988] EWCA Civ J0714-4
The Master of The Rolls
(Lord Donaldson)
Lord Justice Butler-Sloss
Sir Roualeyn Cumming-Bruce
88/0617
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM AN ORDER OF MR JUSTICE SHEEN
Royal Courts of Justice
MR M.N. HOWARD Q.C. and MR N.K. MEESON, instructed by Messrs Holman Fenwick & Willan, appeared for the Appellants (Defendants).
MR K.S. ROKISON Q.C. and MR STEPHEN RUTTLE, instructed by Messrs Clyde & Co., appeared for the Respondents (Plaintiffs).
This appeal from an order of Sheen J., sitting as Admiralty Judge, concerns the arrest of a putative sister ship and is said, probably rightly, to raise novel and important issues.
The story begins on some unrevealed date in 1987 when, in unrevealed circumstances, the "Skipper I" sank at some unrevealed place. The plaintiffs' claim, in the time-honoured phrase, to be "The Owners of the cargo lately laden on board the ship 'Skipper I'". The cargo was shredded steel scrap shipped in Boston under a bill of lading dated 24th April 1987 for carriage to Turkey. The bill of lading was signed on behalf of the master.
On 28th January 1988 the plaintiffs issued a writ in an admiralty action in rem against "The Owners of the Ship or Vessel 'Evpo Agnic'"and on 1st February 1988 applied for a warrant for the arrest of that ship. The application was supported by an affidavit sworn by Miss Fairhurst, a legal assistant in the employ of Clyde & Co., the plaintiffs' solicitors. She swore two further affidavits at later stages, but this was the affidavit which led to the issue of the warrant and to the arrest of the "Evpo Agnic".
Miss Fairhurst made the following points:
(i) "The Plaintiffs' claim against the Owners of the Ship or Vessel 'EVPO AGNIC', who are, or were, at all material times the Owners of the Ship or Vessel 'SKIPPER 1', is for damages for breach of an oral and/or wirtten contract and/or duty in and about the loading, handling, custody and care of the Plaintiffs' cargo and the carriage thereof on board the Defendants' Ship or Vessel 'SKIPPER 1' in the year 1987".
(ii) "The person who would be liable in an action in personam ('the relevant person') when the cause of action arose against the 'SKIPPER 1' is also the beneficial owner as respects all the shares in the ship or vessel 'EVPO AGNIC' at the time the Writ was issued herein."
(iii) The "Skipper I" was at all material times owned by Skipper Shipping Co. S.A. of Panama and was managed by Pothitos Shipping Co. S.A. of Panama.
(iv) The shareholders in Skipper Shipping Co. S.A. were Rodolfo Silva Batista and Jose Ignacio de Sedas, each holding one share in the company. The president/director and vice-president/director were respectively Evangelos Pothitos and Dimitrios Kapsarachis. In a susbequent affidavit Miss Fairhurst corrected this information, having been told that the two alleged shareholders may only have had a right to become shareholders which, it appears, is sufficient for the purposes of the formation of a Panamanian company. Nothing turns on this.
(v) The "Evpo Agnic" is and was at all material times owned by Agnic Shipping S.A. of Panama.
(vi) The shareholders—or those having a right to become shareholders—in Agnic Shipping S.A. and that company's president/director and vice-president/director were the same individuals as was the case with Skipper Shipping Co. S.A.
Miss Fairhurst's conclusion was expressed in the following terms:
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"(13) Thus, although prima facie the 'SKIPPER 1' and 'EVPO AGNIC' are owned by separate one ship-owning companies, it becomes clear on lifting the veil of incorporation that the shareholders in each of these companies are the same, and their President/Director and Vice President/ Director are also the same.
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(14) In the circumstances it is my belief that the owners of the Vessel 'SKIPPER 1' were on the date of the issue of the Writ herein beneficial Owners as respects all shares in the Ship or Vessel 'EVPO AGNIC', and that it is clearly the case that the two separate companies which are the registered owners according to Lloyd's Records, are part of an arrangement which has the effect of covering up the true ownership of these Vessels. Such being the case I respectfully submit that the Court should lift the corporate veil in order to determine that the 'relevant person', who would be liable on an action in personam, is also the present beneficial owner of all shares in the 'EVPO AGNIC.'
The warrant was issued on 18th February 1988 and the "Evpo Agnic" arrested in caridff on the following day. It is only fair to say that if there was any doubt about whether Miss Fairhurst was alleging that the registered owners of the "Skipper I" were the beneficial owners of the "Evpo Agnic" or that both vessels were in the same beneficial ownership, which could, of course, be that of a third party, she made the latter allegation in a telex message to the defendants' solicitors immediately before the arrest.
On 23rd February 1988 Sheen J. heard an application by the defendants to set aside the writ and the warrant for arrest. In the light of the fact that the matter was very urgent, he gave his decision without reasons. That decision was to order the defendants to disclose all documents relating to the owner-ship of the vessels "Skipper I" and "Evpo Agnic" and to adjourn further consideration of the application to set aside the writ and warrant until after such disclosure. He also gave leave to appeal to this court.
Subsequently, with a view to assisting this court, Sheen J. sent the parties a note of his reasons. He recorded that Mr Meeson, counsel appearing for the defendants, had submitted that this was a simple case of two ships owned by different corporate entities which could not be sister ships. He then referred to his own decision in The Maritime Trader [1981] 2 Ll.L.R. 153 in which he had held that the only vessels which might be arrested in respect of a maritime claim were the particular ship in respect of which the claim arose and any other ship in the same ownership, and that a shareholder had no property, legal or equitable, in the assets of a company, adding that he did not wish to retract anything which he had said in that judgment.
He then referred to the judgment of Slynn J. in The Aventicum [1978] 1 Ll.L.R. 184, 187 and reviewed the evidence, including evidence relating to mortgages. It is not entirely clear what evidence he had as to mortgages and it may well be that he had all or some of the information given to this court in a further affidavit by Miss Fairhurst sworn after the hearing before him. This tended to show that a number of Panamanian vessels, including the "Skipper I" and the "Evpo Agnic", each of which had a different Panamanian company as the registered owner, were all managed as a fleet by Pothitos Shipping Co. S.A., also of Panama, but carrying on business in Greece, and that part of the money required to enable the fleet to be acquired or run was raised by something in the nature of a fleet loan secured by mortgages of individual vessels in the fleet, including the "Evpo Agnic", but not the "Skipper I".
Sheen J.'s conclusion was expressed in these terms:
"Mr. Hirst says that the totality of the evidence shows that there is good...
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