The Myrto
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE SHAW |
| Judgment Date | 27 May 1977 |
| Judgment citation (vLex) | [1977] EWCA Civ J0527-3 |
| Date | 27 May 1977 |
| Court | Court of Appeal (Civil Division) |
[1977] EWCA Civ J0527-3
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the Admiralty Court
The Master of the Rolls
(Lord Denning)
Lord Justice Roskill
Lord Justice Shaw
Admiralty action in rem against:
The Ship or Vessel "Myrto"
Lincoln's Inn, London, W.C.2.)
MR. C. STAUGHTON and MR. HAVELOCK-ALLAN (instructed by Messrs. Constant & Constant) appeared on behalf of the Plaintiffs/Appellants.
MR. B. EDER (instructed by Messrs. Offenbach & Co.) appeared on behalf of the Defendants.
MR. JOHN GRIFFITHS Q.C. and MR. R. AIKENS (instructed by Messrs. Thomas Cooper & Stibbard and Norton, Rose, Botterell & Roche) appeared on behalf of the Third and Fourth Interveners.
THE HON. PEREGRIN SIMUN (instructed by the Treasury Solicitor) appeared on behalf of the Admiralty Marshal.
This is another urgent case. It is the remarkable history of a vessel called The Myrto, carrying 15,000 tons deadweight. She is registered in Greece, but she was mortgaged in 1974 to Kleinwort, Benson Ltd. They provided the sum of £2,000,000. We are told that it was provided by the mortgagees so that the ship could be acquired by its owners, a Liberian company, and trade with her.
In late 1976 she was chartered to a Greek line, Nostos Athene Management S.A., on a very strange and unusual charter. In pursuance of that charter she loaded at Antwerp a mixed cargo under 54 separate bills of lading. She crossed to Sunderland where she loaded additional mixed cargo under 259 bills of lading. The total on board her at that particular time was some 6,000 tons of cargo, although she could have taken 15,000. The bills of lading were to send "freight prepaid" for carriage from Europe to countries in the Middle East. But then fate befell her. On the 10th December of last year World Vide Bunkering S.A. began an action in rem fear £120,000 for oil bunkers supplied in Dubai. The ship was arrested at Sunderland. Nevertheless she went on loading cargo at Sunderland. But then in January further trouble arose. The bank, the mortgagees, Kleinwort, Benson arrested the ship because of the moneys owing to them on the mortgage. The sum of £1,300,000 was then outstanding on the mortgage.
Then there was all sorts of trouble. The ship could not remain at Sunderland because there was no berth available for her to be there. She was to be brought down to London. The crew had not been paid. They were not going to move the ship until they were paid. The union came in. The vessel was blacked, The upshot of it was that the bank had to pay £60,000 in wages so as to get the vessel down to London. The mortgagees had to provide that extra sum to pay in order to get her to London. So she got to London. There was then much dispute as to the respective rights in the matter as between the bank and the shipowners and the charterers. There were many applications to Mr. Justice Brandon. Ha gave a most careful and illuminating judgment on the 4th March, 1977.
He said that many of the natters should go for trial. They could not he decided by him at that stage. Banding trial, he made an order for the sale of the ship, then the question arose as to how the sale was to be effected, since she had on her 6,000 tons of cargo on board, The freight had been prepaid for a Journey to the Middle East, That Journey could not be fulfilled, some of the cargo owners, such as B. p., were ready to pay the discharging costs of their particular cargo; but this was not practicable, because the Admiralty Marshal reported that the vessel could not be unloaded in separate parcels. The cargo had to be discharged as a whole before the ship could be sold, Application was made to the Court for determining how that should be done.
the rival views were these, the mortgagees said that the cost of unloading this whole cargo would be about £150,000, they said that it was the duty of the cargo owners to take this cargo off the ship. So it was the cargo owners who ought to pay that £150,000, The venture having been frustrated it was for them to take their cargo off and pay the costs of the discharge of the cargo. On the other hand the cargo owners said that in order to get this ship sold her had to be emptied of cargo, and the costs of discharging it (so as to make the ship saleable) should be part of the costs of realising the sale of the ship. The discharge costs ought to be added to the costs of the Admiralty Marshal and so become a first charge on the proceeds of sale of the vessel,
The point was argued before Mr. Justice Brandon. He had to decide it quickly, because expenses were running up at the rate of £12,000 a week, The costs were running up, as well as the cargo owners being kept out of their goods.
on the 17th May of this year Mr, Justice Brandon made the following order;
"1. The Admiralty Marshall shall as soon as reasonably practicable make arrangements for
(a) discharging the said cargo;
(b) storing it ashore after discharge where necessary
(c) Putting it at the disposal of those persons having title to possession thereof upon reasonable proof of such title.
"2. That the Admiralty Marshal be at liberty to insure his liability arising from his carrying out the directions contained in paragraph 1 above.
"3. That for the purposes of paragraph 1(o) above the Admiralty Marshal be at liberty to advertise in such manner as he thinks fit the fact that cargo has been discharged and stored and is at the disposal of those persons entitled thereto upon seasonable proof as to title.
Those three are not seriously disputed. She next item is:
"4. That all expenses incurred by the Admiralty Marshal in acting under this order shall form part of his expenses in executing the Commission for Appraisement and Sale."
The mortgagees dislike item 4. It means that the whole of the £150,000 will come first in priority to any claim of the bank under their mortgage. It will eat up much of the proceeds of sale. The ship itself, we are told, is only expected to fetch about £640,000. So the mortgagees have appealed against the Judge's order. They ask for paragraph 4 to be set aside and for this paragraph to be inserted:
"4. That before delivering the cargo to those persons being entitled to possession there of upon reasonable proof of such title, the Marshal shall
(a)require payment from such persons of a proportionate part of the expenses incurred by him in acting under paragraphs (1), (2) and (3) above, and
(b)in default of such payment within 56 days, or in any case in default of an application to take delivery of the said cargo by the persons entitled to possession thereof within 56 days of the date of notice or advertisement of the discharge of the ship, sell the cargo and deduct from the proceeds of sale a proportionate part of the expenses incurred by him as aforesaid, and hold the remainder of the proceeds pending further directions".
There is the controversy. The cargo owners say that they want to have this cargo discharged or released to them, free of the costs of discharging it: whereas the mortgagees say that the cargo owners who want their cargo ought to pay thedischarging costs - each in proportion to his own parcel - and that those cargo owners who do not claim their parcels within 56 days ought to be taken to have abandoned any claim and their parcels should be sold to pay the expenses.
I need not spend much time on the legal principles involved, Mr. Staughton relies on a passage in Roscce's Admiralty Practice at page 287 in which it is said "When the Marshal has In his custody a vessel with a cargo on board, and he is ordered to sell -the vessel only, the cargo owners will be given a reasonable time by the Court wherein to effect the unlivery of the cargo, but if the unlivery is not effected on the time fixed, the...
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Table of Cases
...(C.A.) ....................................................................317 The Myrto, [1977] 2 Lloyd’s Rep. 243 (Q.B.), rev’d [1978] 1 Lloyd’s Rep. 11 (C.A.) ............................................................................... 435 The Scaptrade, [1983] 2 A.C. 694 (H.L.) ...........
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Table of cases
...[2021] EWHC 2842 (Ch) ........................................................... 94 The Myrto, [1977] 2 Lloyd’s Rep 243 (QB), rev’d [1978] 1 Lloyd’s Rep 11 (CA) ................................................................................................. 599 The Scaptrade, [1983] 2 AC ......