The River Rima
| Jurisdiction | England & Wales |
| Judge | Lord Bridge of Harwich,Lord Brandon of Oakbrook,Lord Brightman,Lord Ackner,Lord Goff of Chieveley |
| Judgment Date | 16 June 1988 |
| Judgment citation (vLex) | [1988] UKHL J0616-1 |
| Date | 16 June 1988 |
| Court | House of Lords |
[1988] UKHL J0616-1
House of Lords
Lord Bridge of Harwich
Lord Brandon of Oakbrook
Lord Brightman
Lord Ackner
Lord Goff of Chieveley
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend Lord Brandon of Oakbrook. I agree with it and for the reasons he gives I would dismiss the appeal.
My Lords,
The appellants in this case are Tiphook Container Rental Co. Ltd., whose business is the renting of cargo containers to those who use them, including shipowners. I shall refer to them as Tiphook. The respondents are the Nigerian National Shipping Line Ltd., who own and operate a fleet of ships designed to carry general dry cargo and containers at the same time and known for that reason as "combo" ships. One such ship is the River Rima. I shall refer to them as N.N.S.L.
By a writ issued in the Admiralty Court on 9 March 1987 Tiphook began an action in rem against the River Rima and arrested her in it. The writ was endorsed as follows:
"The plaintiffs' claim is for (1) damages for conversion in respect of goods or materials namely containers supplied to the River Rima and/or other sister ships in same beneficial ownership pursuant to an agreement dated 1 July 1986 and (2) damages for breach of clause 8 of the said agreement and/or an implied term thereof by failing to maintain the containers in good condition and repair."
By notice of motion dated 12 March 1987 N.N.S.L., sued as the owners of the River Rima, applied for an order that the writ and arrest be set aside on the ground that Tiphook's claim was not within the Admiralty jurisdiction of the High Court and that the Admiralty Court accordingly had no power to entertain an action in rem in respect of it. By an order made on 3 April 1987 Sheen J. declared that Tiphook's claim was within the Admiralty jurisdiction of the High Court by virtue of paragraph ( m) of section 20(2) of the Supreme Court Act 1981 and dismissed N.N.S.L.'s application to set aside the writ and arrest with costs. N.N.S.L. appealed to the Court of Appeal (Sir John Donaldson M.R., Nourse and Woolf L.JJ.). That court by an order made on 1 May 1987 allowed the appeal, set aside the writ and arrest and awarded N.S.S.L. their costs in both courts. The Court of Appeal refused Tiphook leave to appeal but leave was later given by your Lordships' House.
The agreement dated 1 July 1986 referred to in the endorsement on the writ was entitled "Lease Plan" and provided for the hiring of cargo containers from Tiphook by N.N.S.L. as required by the latter from time to time. It incorporated Tiphook's standard terms and conditions of business. The principal features of the agreement were these. First, containers hired by N.N.S.L. from Tiphook were to be collected by N.N.S.L. from, and re-delivered by them to Tiphook at, depots run by Tiphook at various ports and inland cities in numerous countries throughout the world. Secondly, the rent of containers was to be calculated on a daily basis at prescribed rates for different types, beginning on the day of collection and ending on the day of re-delivery, and was to be paid monthly. Thirdly, containers were to be supplied by Tiphook at the time of collection in good order and condition, and were to be maintained during hire, and re-delivered by the N.N.S.L. at the end of hire, in like condition, subject to fair wear and tear. Fourthly, the hire of each container was to be treated as a separate contract.
There was no term in the agreement relating to the use to which containers hired under it were to be put. In particular, there was no provision that containers so hired or any of them should be used for the carriage of cargo by any of N.N.S.L.'s ships, specified or unspecified. The procedure followed by N.N.S.L. pursuant to the agreement was dealt with in an affidavit sworn by Mr. Abdullah Abubakar, the Liverpool line manager of N.N.S.L., in which he deposed:
"6. The procedure regarding the hire of the containers is as follows. As and when the containers are required, N.N.S.L. contact their leasing agents - all current leasing is now dealt with by Scamar of Paris. The agents then arrange for the containers to be leased and to be delivered to the location where they are required, normally direct to the shippers so that the containers can be stuffed and sometimes to a container terminal. 7. The containers will be carried by an N.N.S.L. vessel if such is available. However, if no N.N.S.L. vessel is available, they will be carried aboard any other vessel which is available with N.N.S.L. being named as the shipper on the bill of lading …. 9. I am informed by Mr. Alegbeleye, the Hamburg line manager of N.N.S.L., that containers leased to N.N.S.L. have been used by Nigerian Green Line Ltd…. over the last six months by way of an agreement reached between N.N.S.L. and Nigerian Green Line Ltd. 10. Accordingly, I verily believe that the containers hired by N.N.S.L. are for the use of the company and not by way of supplies to N.N.S.L. vessels, for their operation or otherwise. The containers are for the convenience of the various shippers utilising N.N.S.L. services …."
It seems clear from this evidence, and I did not understand counsel for Tiphook to contend otherwise, that, at the time when N.N.S.L.'s agents took delivery of any container from the depot run by Tiphook at which it was to be found, Tiphook did not know, from the terms of Scamar's requests or otherwise, on what ship, whether owned by N.N.S.L. or some other shipowners, such container, after being stuffed with cargo somewhere on land, would ultimately be carried. As will appear later, I regard this circumstance as of the utmost importance in the decision of this appeal.
My Lords, the Admiralty jurisdiction of the High Court and the exercise of it in rem are governed by sections 20 and 21 of the Supreme Court Act 1981, which provide so far as material:
"20(1). The Admiralty jurisdiction of the High Court shall be as follows, that is to say - ( a) jurisdiction to determine any of the questions and claims mentioned in subsection (2); … (2). The questions and claims referred to in subsection (1)( a) are - … (m) any claim in respect of goods or materials supplied to a ship for her operation or maintenance; … 21(4). In the case of any such claim as is mentioned in section 20(2)( e) to ( r), where - ( a) the claim arises in connection with a ship; and ( b) the person who would be liable on the claim in an action in personam ('the relevant person') was, when the cause of action arose, the owner or charterer of, or in possession or control of, the ship, an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against - (i) that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or (ii) any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all shares in it."
My Lords, the claim endorsed on the writ is framed as a single claim, relating to an unspecified number of containers. Since, however, the hire of each container constituted a separate contract made under the umbrella of the overall leasing agreement, the claim so framed must be treated as comprising a series of separate claims relating to each of the containers which is alleged to have been converted or not properly maintained. The main question to be decided, therefore, is whether, having regard to the terms of the leasing agreement, and the procedure followed by the parties under it, each of the series of claims relating to individual containers made by Tiphook, is a "claim in respect of goods or materials supplied to a ship for her operation or maintenance" within the meaning of paragraph ( m) of section 20(2) of the Act of 1981. If that question is answered in the affirmative, but not otherwise, a further question arises whether the jurisdiction of the Admiralty Court in respect of each such claim can be exercised in rem against the River Rima under section 21(4) of the Act of 1981.
Certain matters are not, and it seems to me cannot be, in dispute. First, containers are "goods" within the meaning of paragraph ( m). Secondly, the word "supplied" in paragraph ( m) includes supply by way of hire as well as sale. Thirdly, assuming that containers are supplied to a ship at all, they are unlikely to be supplied to her for her "maintenance"...
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