LD Commodities Rice Merchandising LLC and Another v The Owners and/or Demise Charterers of the Vessel Styliani Z
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 28 October 2015 |
| Neutral Citation | [2015] EWHC 3060 (Admlty) |
| Docket Number | Case No: AD-2014-000018 |
| Court | Queen's Bench Division (Admiralty) |
| Date | 28 October 2015 |
[2015] EWHC 3060 (Admlty)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Mr. Justice Teare
Case No: AD-2014-000018
Michael Nolan QC (instructed by Gateley PLC) for the Claimants
John Russell QC (instructed by Campbell Johnston Clark Limited) for the Defendant/Owner
Hearing date: 7 October 2015 (with further written submissions received dated 19 and 22 October 2015)
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
A claimant with an admiralty claim may issue a claim form in rem or a claim form in personam1. In this case the Claimants intended to issue a claim form in rem but used the form appropriate for issuing a claim form in personam. That, together with the fact that the claim form was served after the expiry of the four months permitted for service of a claim form in personam but within the 12 months permitted for service of a claim form in rem, has led to the Admiralty Registrar holding that the court has no jurisdiction over the Claimant's claim. This is an appeal by the Claimants, with leave, from the decision of the Admiralty Registrar.
The Claimants are members of the Louis Dreyfus Group and claim damages in the sum of about US$1.3m in respect of wet damage caused to nearly 3000 mt of their cargo of rice as it was being loaded on board the Defendants' vessel STYLIANI Z at Lake Charles in August 2012.
By a letter of undertaking dated 20 September 2012 the North of England P&I Club provided security in respect of the claim and agreed, if requested, to appoint solicitors to accept service of in rem or in personam proceedings in the English High Court.
Although no bill of lading was issued in respect of the cargo which was discharged at Lake Charles and sold by way of salvage the Claimants proceeded on the basis that there was a one year time period pursuant to the Hague Rules or the US Carriage of Goods by Sea Act for the commencement of suit and on 29 August 2013 sought a three month extension until 3 December 2013. In their email they presumed that the owners of the vessel were Ionia Shipping SA. The extension was granted by the Club but nothing was said as to who the owners were. On 29 November 2013 the Claimants sought a further extension until 3 March 2014 which was also granted.
On 24 February 2014 the Claimants instructed Gateley LLP to issue proceedings. Mr. Messent of Gateleys was informed by the Claimants that it was thought Ionia Shipping SA were the registered owners but that had not been confirmed. A search carried out through Lloyds List Intelligence suggested another company was the owner and so Mr. Messent decided to issue a claim form in rem (which only requires the defendants to be described, not named).
His unchallenged account of what then happened is as follows:
"As I recall, I searched for and completed the Claim Form online, then printed it for issue. Unfortunately by mistake I clicked on the wrong form so used the general admiralty claim form (ADM1A) rather than the form for actions in rem (ADM1). ……. In retrospect, I accept that my error in selecting the wrong from should have
been obvious to me, and indeed I find it very difficult to understand how the mistake was made. "
When completing the claim form he described the defendants as "The Owners and/or Demise Charterers of the vessel STYLIANI Z." The form required him to insert the name and address of the Defendant (which he recalls surprised him) and he inserted the name of Ionia Shipping Overseas SA with an address c/o Dalomar Shipping in Greece. The claim form was dated 28 February 2014. At 1743 that day he emailed the Claimants with a copy of the claim form which he described as an " In Rem Claim Form issued this afternoon as discussed."
On 3 March 2014 the Claimants forwarded the email and a copy of the claim form to the North of England P&I Club. The Claimants invited the Club to revert within the week failing which they said they would request Mr. Messent to approach the Club seeking the appointment of solicitors and thereafter would effect service. The Club responded on 5 March 2014 seeking, amongst other matters, further details of the claim. The Claimants replied on 13 March 2014 and sought certain information and documentation.
On 21 March 2014 the Claimants asked the Club to nominate solicitors for the purpose of accepting service. On 27 March 2014 Campbell Johnson Clark ("CJC") informed the Claimants that they had instructions to accept service.
On 20 May 2014 Mr. Messent emailed CJC seeking, amongst other matters, certain documentation. On 6 June CJC said that they would aim to revert by 22 June 2014.
On 30 June 2014 the four months permitted for service of the in personam claim form expired.
Mr. Messent sent a reminder on 14 July 2014. On 16 July 2014 CJC explained why they were confident that their clients bore no liability for the alleged loss but also pointed out that the claim form had not been served within four months of issue and therefore that the claim was time barred.
On the same day Mr. Messent pointed out that in the case of an in rem claim form the time for service was modified and that service would follow "in early course".
Thereafter he instructed counsel and was made aware that he had used the wrong court form. On 15 August 2015 he amended the claim form in manuscript to read as if it were an in rem claim form. In particular he added the words that it was an "Admiralty claim in rem against the ship STYLIANI Z", deleted the name and address of the Defendants and changed the reference to form ADM1A to a reference to form ADM1. However, the description of the Defendants and the brief details of the claim remained the same.
On 2 October 2014 Mr. Messent informed CJC that the Particulars of Claim had now been settled by counsel. He provided copies of the Amended Claim Form and the Particulars. He explained that
"although the defendants were correctly entered by description for the purposes of the intended in rem proceedings, I inadvertently used the in personam form. As you will see, the Claim Form has accordingly been amended to the correct format."
On 6 October 2014 the Amended Claim Form and Particulars were served.
On 24 October 2014 the Defendants challenged the jurisdiction of the court because the in personam claim form had not been served within four months and applied for an order disallowing the amendment.
The application was heard on 3 February 2015 and further written submissions were provided on 12 March 2015. In addition to resisting the application to disallow the amendment Mr. Michael Nolan QC, on behalf of the Claimants, relied upon CPR 3.10 which gives the court power to remedy errors of procedure. In the alternative he submitted that the sending of the Claim Form to the Defendant's P&I Club on 3 March 2014 should be treated as good service pursuant to CPR 6.15.
On 21 July 2015 the Admiralty Registrar disallowed the amendment and held that, since the claim form was in personam and had not been served within four months of issue, service should be set aside. He dismissed the Claimants' applications pursuant to CPR 3.10 and CPR 6.15.
Before considering Mr. Nolan's submissions on this appeal it is necessary to have in mind the key characteristics of an Admiralty action in rem. Although it has been held by the House of Lords that for the purposes of section 34 of the Civil Jurisdiction and Judgments Act 1982 an action in rem is an action against the owners of the ship from the moment that the Admiralty Court is seized with jurisdiction (see The Republic of India v India Steamship Co. Ltd. (No.2), the Indian Grace [1998] AC 878 at p.913 per Lord Steyn) an Admiralty action in rem nevertheless has a characteristic which distinguishes it from an Admiralty action in personam. That characteristic is that the in rem claim form may be served within the jurisdiction on the vessel named in the claim form as the vessel against which the action is brought (by fixing a copy of the claim form on the outside of the vessel in a position which may be reasonably expected to be seen). The action may then proceed to trial even though the owners of the vessel are out of the jurisdiction and have not been served personally with the proceedings or acknowledged service of proceedings. The vessel may also be arrested by the Admiralty Marshal and when judgment is given (or pendente lite) the vessel can be sold by the Admiralty Court and the judgment satisfied from the proceeds of sale. In practice, in the great majority of cases, the owners' P&I Club will provide security for the claim and instruct solicitors to accept service so that the action will proceed in a manner indistinguishable from an action in personam. But that practice should not obscure the distinguishing characteristics of an action in rem. They are reflected in the CPR. CPR 61.3 provides that a claim form in rem must be served within 12 months after the date of issue whereas a claim form in personam must, pursuant to CPR 7.5, be served within 4 months after the date of issue. This difference reflects the circumstance that a claimant in rem may have to wait for a period in excess of 4 months for the vessel to come within the jurisdiction.
In Stolt Kestrel v Niayazi S [2014] 2 Lloyd's Reports 483 at paragraph 73 Hamblen J. said that the distinction between in rem and in personam...
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