Chapter 2

Subject-Matter Jurisdiction

Introduction

2.1 As previously observed¹ the jurisdiction of the Admiralty Court is limited by subject-matter. Where jurisdiction is invoked in personam this limitation upon subject-matter jurisdiction is of only technical importance as section 5(5) of the Senior Courts Act 1981 provides that the whole jurisdiction of the High Court belongs to all divisions alike, and section 4(3) provides that all the judges of the High Court have equal power authority and jurisdiction. A claim in personam commenced in the Admiralty Court, but not within the scope of the jurisdiction of the Admiralty Court, can simply be transferred out of the Admiralty Court to a more appropriate court. However, only the Admiralty Court may exercise jurisdiction in rem by way of an Admiralty claim in rem. In such cases it is a necessary, but not a sufficient, prerequisite that the court has subject-matter jurisdiction. It is therefore necessary to consider in some detail the various heads of subject-matter jurisdiction which are provided by section 20(1) of the SCA 1981. In this chapter these will each be considered in turn, following the order in which they appear in section 20(2) of the SCA 1981 (as amended by the Merchant Shipping Act 1995). It is however convenient to consider the definition of a ‘‘ ship’’ as a preliminary matter, as most of the heads of jurisdiction are concerned with claims in connection with ships. However, before doing so it is necessary to say something about the relationship between subject-matter jurisdiction of the Admiralty Court and jurisdiction under private international law.

Subject-matter jurisdiction: necessary but not sufficient

2.2 The catalogue of subject matter jurisdiction contained in section 20 of the SCA and its predecessors² is the result of a protracted “turf war” between the Admiralty Court and the common law courts. Statutes were passed to limit and punish³ improper use of the Admiralty Court. The common law courts also issued domestic anti-suit injunctions (called “writs of prohibition”) to prevent litigants pursuing claims in the Admiralty Court.⁴ However, the Admiralty Court then enjoyed a period of resurgence in the nineteenth century culminating in a series of statutes the general effect of which was to expand the jurisdiction of the Admiralty Court considerably.⁵ The present-day catalogue set out in section 20 of the SCA thus largely corresponds to the contents of the guides to practice produced for the High Court of Admiralty shortly before it merged with the common law courts to produce the unitary High Court of Justice.⁶ The traditional jurisdiction of the Admiralty Court can thus be summarised under the following headings:

• (1) Claims for possession of a ship;
  
• (2) Claims under a ship mortgage;
  
• (3) Claims under bottomry and respondentia bonds;
  
• (4) Collision damage claims;
  
• (5) Damage to cargo;
  
• (6) Salvage;
  
• (7) Towage;
  
• (8) Necessaries;
  
• (9) Seamen’s wages.

However, the nineteenth-century statutes which finally settled the jurisdiction of the Admiralty Court were passed at a time when the only control over the international exercise of that jurisdiction were the rules on service and the doctrine of forum non conveniens. Subject only to compliance with the technical rules governing service of in personam and in rem writs, the jurisdiction of the Admiralty Court was exorbitant and almost unlimited.⁷ The self-imposed common law limit on the exercise of the jurisdiction which eventually become known as the doctrine of forum non conveniens was a flexible and sensitive mechanism adapted and applied by judges to suit the requirements of particular cases. The situation is now somewhat different. The statutory heads of jurisdiction created by section 20 of the SCA 1981 must now all be read consistently with, and subject to, the Brussels I Regulation, the Brussels Convention and the Lugano Convention. Section 20 of the SCA 1981 does not create a special jurisdiction outside of the European jurisdictional code which now governs when any Court (including the Admiralty Court) has jurisdiction over any particular case. The European jurisdictional rules were imported initially into English law in 1982 in the form of the Brussels Convention and then subsequently in the directly effective form of Regulation 44/2001 (“the Brussels I Regulation”). Insofar as remnants of the old approach survive, they do so only as exceptions to the overriding rules of European law.⁸ Thus, while it still remains necessary as a matter of purely domestic law to determine whether the Admiralty Court has subject-matter jurisdiction over any particular claim, even if it does, whether or not the Court actually has jurisdiction to hear the claim as a matter of English (European) private international law is a question which has to be determined under the applicable jurisdictional codes: that is the Brussels I Regulation, the Lugano Convention or the Brussels Convention. This is dealt with in detail in Chapter 3 of this book.

“Ship”

2.3 By section 24(1) of the SCA 1981 unless the context otherwise requires, ” ‘ship’ includes any description of vessel used in navigation⁹ and (except in the definition of ‘port’ in section 22(2) and in subsection 2(c) of this section) includes, subject to section 2(3) of the Hovercraft Act 1968, a hovercraft”. “Vessel” is not defined by the 1981 Act, and it is no longer defined by the Merchant Shipping Act 1995.¹⁰

2.4 The word “ship” has a narrow technical meaning, viz. a sailing vessel of three or more masts with square rigged sails on all three masts, but it also bears a much broader meaning and it is the latter which is relevant. The Oxford English Dictionary refers to a “ship” as “a large seagoing vessel (opposed to a boat)”. This is reflected in judicial authority. In Ex p. Ferguson¹¹ Blackburn J said:

Thus the essence of a ship is that it is a seagoing vessel in the sense of being a navigable object, but as can be seen from the authorities considered below it need not actually go to sea. The statutory definition by the use of the word “includes” predicates an “extensive”, rather than an “exclusive” or “exhaustive”, definition.

“vessel”

2.5 The Oxford English Dictionary defines vessel as “A craft or ship of any kind now usually one larger than a rowing-boat and often restricted to sea-going craft or those plying on the larger rivers or lakes”. This is reflected in judicial authority. In Steedman v Scofield¹² Sheen J said¹³:

As to the question of which forms of property aboard the ship are considered to be part of the “ship” itself, it has been held that this extends to all her equipment and appurtenances, including those which have been removed for maintenance and/or safekeeping.¹⁵ In The “Silia”¹⁶ Sheen J held that in the context of the immediate predecessor of section 24(1) of the SCA 1981, “ship” meant all the property aboard the ship other than that which is owned by someone other than the owner of the ship. It should be noted that bunkers will usually count as part of the ship’s equipment unless e.g. a term in the charterparty deems them to belong to a charterer.¹⁷

“Used in navigation”

2.6 This phrase involves the consideration of two matters: the waters on which she is used, and the vessel herself. The waters upon which she is actually used must be navigable waters and the vessel must be of a type which is capable of being used in navigation.

Navigable waters

2.7 In The Mayor & Corporation of Southport v Morriss¹⁸ an electric passenger launch used exclusively on a small artificial lake was held not to be “used in navigation” and thus not to be a ship. Lord Coleridge CJ said¹⁹:

However, that case was distinguished in Weeks v Ross²⁰ where a motorboat used exclusively in the River Exe between Exeter and a lock, beyond which a canal connected via further locks with a tidal estuary, was held to be a ship. It was pointed out by Channell J²¹ that in The Mayor & Corporation of Southport v Morriss the sheet of water was enclosed; it was a lake. In Weeks v Ross on the other hand, although the vessel used only about one and one half miles of the canal, the canal itself was not enclosed and self-contained as it communicated via locks to the sea and vessels passed up and down it to the dock at Exeter.

2.8 In Curtis v Wild²² these two cases were applied in the context of sailing dinghies being used on a reservoir and it has held that they were not “used in navigation”. Henry J held that navigable waters meant waters “that are used by vessels going from point A to point B and not simply used for pleasure purposes even if those pleasure purposes may involve steering a pre-set course”,²³ and that in that case there was no “navigation in the sense of proceeding from an originating place A to a terminus B for the purpose of discharging people or cargo at the destination point. It was simply used for pleasure purposes by people who were messing about in boats.”²⁴ One should however be careful not to place too much emphasis on the distinction drawn between quasi commercial use and “messing about in boats”. In the context of the case before him, a reservoir, Henry J’s distinction may have been apt, but it may not be applicable to all circumstances. The same dinghies could be used for “messing about in boats” in the Solent, and they would in such circumstances be held to be vessels for example for the purposes of the International Regulations for Preventing Collisions at Sea 1972 which apply to “all vessels on the high seas and all waters connected therewith navigable by seagoing vessels”.²⁵

Capable of being used in navigation

2.9 There are two lines of cases which consider different aspects of the question whether an object is capable of being used in navigation. There are those cases which consider the question whether the craft is sufficiently “seagoing” to be a ship rather than a boat and there are those cases which consider whether the object is sufficiently “mobile” to be a vessel as opposed to some other structure.

2.10 In Steedman v Scofield²⁶ Sheen J had to consider whether a jet-ski was a “ship” and in this context he considered what was meant by the phrase “used in navigation”. He said²⁷:

In the case before him he held that although it may be possible to navigate a jet-ski, it was not a vessel used in navigation.²⁸ This seems entirely consistent with his definition as there is usually nothing ordered or planned about the movement of a jet-ski on water:

The issue arose again in the context of an appeal against a criminal conviction pursuant to section 58(2)(a) of the Merchant Shipping Act (MSA) 1995. The Court of Appeal (Criminal Division) in R v Goodwin²⁹ held that the words “used in navigation” excluded from the definition of “ship or vessel” in the MSA 1995 craft such as jet-skis that were simply used for having fun on the water without the object of going anywhere. See [18]–[34], and in particular;

2.11 The fact that a ship is in the course of being launched does not prevent it from being a ship.³¹

2.12 Difficult questions can arise when the court is asked to consider whether an object is sufficiently mobile to be classified as a ship. The leading case in which an object was held not to be a ship was the decision of the House of Lords in Wells v Owners of “Gas Float Whitton No. 2″.³² The Gas Float Whitton No. 2 was 50 feet long and 20 feet broad: its hull somewhat like that of a ship or boat, its two ends shaped like the bow of a vessel: it was made of iron, and had no oars, mast, stern-post, fore-post or rudder: a cylinder containing gas occupied the interior: the gas by its own elasticity supplied for about six weeks the light which was rigged on a pyramid of wood about 50 feet high. No one was stationed on it. There was evidence that it could not be used for navigation, and that it was next to impossible to tow it. It was moored in the Humber as a beacon to warn vessels off a shoal. It was held that it was not a ship. Lord Herschell said³³:

Lord Watson said³⁴:

2.13 So too in The “Upcerne”³⁵ where the object which was held not to be a ship was the No. 9 (Anson) gas buoy stationed opposite the joint dock at Hull. The buoy consisted of a cylindrical steel body with welded joints, which provided the buoyancy and acted as a reservoir for the gas. A cage-like superstructure of wood and iron was carried on the top of the gas-holder, at the apex of which was fixed the lantern and optical apparatus. The moorings consisted of from 30 to 40 fathoms of 1-inch cable with the necessary shackles, eyes, &c., and a mooring stone weighing about 1 ton. Sir Samuel Evans said³⁶:

2.14 Another important case where an object was held not to be a ship was Merchants’ Marine Insurance v North of England P & I Association.³⁷ That case concerned a pontoon with a crane mounted on it. The pontoon was in a naval dockyard, permanently moored to the river bank by six chains and moored fore and aft to warships. A semi-permanent gangway was laid from the pontoon to the shore. It was in the shape of a ship and adapted by the provision of decks for being inhabited or manned. It was possible to move it, but with difficulty and this was rare. The Court of Appeal held that it was not a ship, but instead came within the phrase “docks, piers, quays, works, jetties, erections or any fixed or movable things other than ships or vessels”. It was emphasised that adaptability for navigation and use for that purpose was one of the most essential criteria to determine whether an object was a ship. Bankes LJ said³⁸:

2.15 The decisions in The “Gas Float Whitton No. 2″ and Merchants’ Marine cases were subject to analysis in Polpen Shipping Company Ltd v Commercial Union Assurance Company Ltd³⁹ where Atkinson J had to consider whether a flying boat was a “ship or vessel” within the meaning of that phrase in a policy of insurance. He stated that he had to give the words “ship or vessel” their natural and ordinary meaning, and he then went on to say “It seems to me that the dominant idea is something which is ‘used in navigation’, and not merely capable of navigating for the moment.”⁴⁰ He concluded his judgment by saying⁴¹:

Similarly in Watson v R.C.A. Victor Co Inc⁴² it was held that a seaplane was not a vessel.

2.16 In The “Blow Boat”⁴³ “a nondescript sort of craft which was employed in the dredging of the river”, a “square thing”, was held not to be a ship.

2.17 It is important also to consider carefully the cases in which objects have been held to be a ship, in order to contrast them with the above. The first is The “Mac”⁴⁴ in which it was held that a hopper barge with no means of propulsion was a “hip” Lord Coleridge CJ said⁴⁵:

Brett LJ said⁴⁶:

Cotton LJ said⁴⁷:

This decision was followed without discussion in The “Mudlark”.⁴⁸ In The “Harlow”⁴⁹ dumb barges with rudders were held to be ships.

2.18 In St. John Pilot Commissioners v Cumberland Ry & Coal Co⁵⁰ the following were held to be ships: barges which had two small sails used to steady the vessels and to assist in strong breezes, which could run before the wind, but which could not otherwise be safely navigated as sailing vessels in the usual way and were intended to be towed from port to port, which had a captain and crew, steering gear and anchors. If they had been fully rigged they would have been capable of being navigated as ordinary steamers.

2.19 In Marine Craft Constructors Ltd v Erland Blomquist (Engineers) Ltd⁵¹ it was held that a pontoon structure (originally a floating crane) was a ship. The structure was about 80 feet long, 50 feet wide and about 5 feet deep, comprising two large pontoons fixed together in the centre, with four smaller pontoons fixed at either end. There were towing bollards at either end. More importantly for the decision the crane had been removed and the pontoon was being used at the material time to transport the crane’s swivel ring from one port to another, and was thus akin to a dumb barge. The judge indicated that had the structure remained a floating crane he would have been in difficulty because he did not know about the use of the crane, and in particular whether it was taken from one place to another, or was used mainly in the same place.

2.20 In Cook v Dredging and Construction Co Ltd⁵² it was held that a “blower boat” was a ship. It was shaped like a ship, had a deck and hatches, companion ladders and other equipment characteristic of a ship, but it was flat bottomed and had flat ends, no rudder and no means of propulsion. Its purpose was for barges to lay alongside and for sludge to be forced by an engine on board the structure from the barges through a pipe to the shore. It had been moored in the same place for 18 months, but it was not kept permanently in one place, but towed from time to time to wherever it was required. The judge considered this point significant.

2.21 In Addison v Denholm Ship Management⁵³ a “flotel” was held to be a ship. A flotel is a complex semi-submersible structure, essentially rectangular in plan view, comprising a platform attached by legs to pontoons to enable it to float. When on station the pontoons are submersed by ballasting in order to improve stability. Its purpose is to provide accommodation for tradesmen, caterers, labourers and others required during the construction and hook-up of fixed offshore oil and gas installations and for this purpose it has accommodation for several hundred workers and has offices, workshops and storage areas. It also has cranes, helicopter landing facilities, and is capable of supplying power to the fixed oil and gas installation. It is capable of proceeding under its own power, but is more usually towed. It is stationed alongside the installation and maintained in position by means of anchors, mooring lines and occasionally by dynamic positioning by means of thrusters. It carries a maritime crew whose function is to man the flotel on passage and on station, and it is fully equipped with navigational instruments.

2.22 In a Canadian case⁵⁴ a floating crane consisting of a heavy crane on a barge which is capable of carrying cargo but is primarily used to discharge cargo from ships and which is not self-propelled but moved by tugboats was held to be a ship on the ground that it was built to do something on water, requiring movement from place to place. In another Canadian case⁵⁵ a submersible was considered to be a ship.

2.23 In United States maritime law “the terms ‘ships’ and ‘vessels’ are used in a very broad sense to include all navigable structures intended for transportation”.⁵⁶ The guiding principle under US law is whether the purpose of the craft is as an instrument of maritime transportation. It has been held that an offshore drilling platform resting on legs extended to the bottom of the sea is a vessel,⁵⁷ on the other hand a fixed oil drilling platform is not a vessel but is an “artificial island”.⁵⁸

2.24 In The “Von Rocks”⁵⁹ the Supreme Court of Ireland held that a backhoe dredger was a ship for the purposes of the Arrest Convention. The nature of the craft was that when not in operation, it was a floating platform comprising 10 individual pontoons bolted together. When in use, it was held in position on the seabed by three spud legs which were capable of being hydraulically lowered and raised. When the legs were lowered to the seabed at the site of dredging the platform became a rigid structure, i.e. it was jacked-up to form a rigid platform and would so remain until the legs were withdrawn and the structure floated again. A backhoe dredger has no bow, no stern, no anchors, no rudder nor any means for steering, and no keel or skeg. It has no means of self-propulsion, mechanical or otherwise, and it has no wheelhouse. One end is rounded to facilitate the operation of the dredger. It has a lighting tower to illuminate the deck and to warn passing vessels of its presence. It has a steel cabin fixed on the platform which contains an office and a toilet. It does not have an ability to carry cargo, spoil or personnel other than those engaged in the dredging operation.

2.25 In Perks v Clark (Inspector of Taxes)⁶⁰ findings by tax commissioners that jack-up rigs were ships were held to be reasonable findings of fact, the commissioners having asked themselves whether they were “used in navigation”. Longmore LJ said⁶¹:

2.26 It is however always a question of fact whether a vessel is “used in navigation” and particular regard is to be had to what use she has been, and is now put. A vessel which had formerly been registered, but which had had all masts, spars and rigging removed except for her lower masts and standing rigging and was moored fore and aft with two anchors and which had been used for the past four years as a coal hulk was held no longer to be a “ship” but had become a mere chattel, a floating coal hulk.⁶²

Not a “Ship”

2.27 The following have been held not to be ships: a raft of timber⁶³; a landing-stage⁶⁴; a gas float moored as a beacon⁶⁵; a new building which had not yet been launched and upon which considerable work was required before she could be used in navigation⁶⁶; a new building which had been launched unfinished without engines or boilers⁶⁷; a pontoon crane⁶⁸; a flying boat⁶⁹; a seaplane⁷⁰; a helicopter with pontoons⁷¹; a jet-ski.⁷²

2.28 It should also be noted that by section 1(1) of the Merchant Shipping Act 1921: “the expression ‘ship’ includes every description of lighter, barge, or like vessel used in navigation in Great Britain, however propelled: provided that a lighter, barge or like vessel used exclusively in non-tidal waters, other than harbours, shall not for the purposes of this Act, be deemed to be used in navigation.”

Senior Courts Act 1981: Section 20(1)(A)—Subsection 20(2)

(a) Any claim to the possession or ownership of a ship or to the ownership of any share therein

No application to aircraft

2.29 This head of jurisdiction applies only to ships and there is therefore no jurisdiction under this head over aircraft.⁷³

Possession

2.30 Historically, the Admiralty Court exercised jurisdiction in claims for possession of a ship.⁷⁴ The ability in the Admiralty Court to proceed in rem against the ship itself, rather than simply against the wrongdoer (in personam) provided a very beneficial remedy, as was observed by Abbott CJ in Re Blanshard⁷⁵:

Today the jurisdiction extends to all questions relating to the possession, both legal and equitable,⁷⁶ of a ship whatever the nationality of the ship, or the domicile or residence of the owner whether British or not and whether registered or not and wherever the residence or domicile of their owners may be.⁷⁷

2.31 Traditionally, in the exercise of jurisdiction regarding possession the court has favoured the person in possession of the ship, and a claimant has had to show a clear case for changing the status quo in order to disturb possession.⁷⁸ However, the right of the majority to possession is absolute irrespective of whether they intend to employ the ship, but the court will not alter possession at the suit of only a moiety.⁷⁹

2.32 Where a master is in possession⁸⁰ and he is not a part-owner of the ship, the court will order his dispossession at the behest of the owners, or a majority of the owners where there are more than one.⁸¹ Where however the master is also a part-owner, it is more reluctant to remove him. In The “New Draper”⁸² Sir William Scott said⁸³:

However, the court will usually remove the master where a majority of the owners agree that he should be removed.⁸⁴

2.33 In a claim for possession the court may also order the production and handing over of ships’ papers,⁸⁵ but it will not do so where there is doubt as to title.⁸⁶

2.34 In modern times this head or jurisdiction is more likely to be invoked in connection with claims for possession arising out of contractual arrangements relating to a ship or to wrongful appropriation of a ship. For example, where an owner has exercised a right of withdrawal under a demise charter so that the demise charterer is no longer entitled to possession of the ship the owner may bring an Admiralty claim in rem seeking possession and arrest the ship.⁸⁷

Ownership

2.35 Until 1840, the High Court of Admiralty had no jurisdiction over questions of ownership.⁸⁸ Today the jurisdiction extends to all questions relating to the ownership, both legal and equitable,⁸⁹ of a ship whatever the nationality of the ship, or the domicile or residence of the owner.⁹⁰ Thus the court will enforce a purchase money resulting trust where a person has provided funds for the purchase of a ship, and he will be presumed to have acquired an ownership interest in the ship proportionate to the amount provided.⁹¹

2.36 In an ownership claim, the court has power to grant a declaration that the claimant is the legal owner of a ship and is entitled to be registered as such.⁹² The court has power to rectify the register of a British ship where some incorrect entry has been made,⁹³ but will not however rectify the register as against a bona fide purchaser who has taken without notice of some earlier fraud.⁹⁴ In practice this is of considerable benefit where a person is unable to obtain registration of a ship because he does not have a bill of sale from the last registered owner. In such cases, a claim in rem may be commenced against the ship in question and when no acknowledgement of service is filed by anyone else claiming rights of ownership, the court can be moved for judgment in default of acknowledgment of service. It should be noted in this connection that section 3 of the Limitation Act 1980 provides an effective six-year root of title, so that where the last registered owner, or last perfected bill of sale, was more than six years prior to the commencement of the claim, the claimant will have title by, in effect, adverse possession, there being no-one with a right of action for conversion.

2.37 The court also has power under paragraph 6 of Schedule 1 to the Merchant Shipping Act 1995 to make an order prohibiting for a time specified any dealing with a registered ship or any share therein.⁹⁵

Title to foreign ships

2.38 Where title to a foreign ship is involved, section 20(1)(a) combined with section 20(2)(a) of the SCA 1981 gives the English Admiralty Court prima facie jurisdiction to try the claim. This jurisdiction is subject to three restrictions. First, ever since the Admiralty Court acquired jurisdiction to adjudicate on matters of title in 1840, it has exercised a self-denying ordinance that it would not do so in respect of a foreign vessel where both claimants were foreigners, except where either the parties consented or the state of registration assented.⁹⁶ Secondly, as with all the provisions in section 20 of the SCA, jurisdiction in ownerships disputes is subject to the rules of the Brussels I Regulation, the Brussels Convention and the Lugano Conventions.⁹⁷ In cases where pursuant to Article 4(1) of the Brussels I Regulation, the Brussels Convention and the Lugano Convention, the common law forum non conveniens rules continue to apply. An application to stay a claim relating to title to a foreign ship on the ground of forum non conveniens is likely to be successful in the absence of some substantial connection with England.

Claims arising under sale and purchase agreements

2.39 A claim by sellers under a sale and purchase agreement for the unpaid purchase price is not a claim for “ownership” or “possession” and so does not fall within this head of jurisdiction.⁹⁸ On the other hand where the seller is entitled to rescind the contract, or to exercise an unpaid seller’s lien then he would have a claim for ownership or possession. Similarly a buyer seeking specific performance of a contract for the sale of a ship by delivery and execution of a bill of sale would be seeking possession and would arguably have a claim to ownership.⁹⁹

(b) Any question arising between the co-owners of a ship as to possession, employment or earnings of that ship

2.40 Historically, the High Court of Admiralty exercised exceptional jurisdiction over disputes and disagreements among the several owners of a ship in order to prevent the obstinacy of some of the part-owners damaging the rights and interests of the others.¹⁰⁰ It was said that “ships were built to plough the sea and not to rot by the wall”.¹⁰¹ Part-owners of a ship were generally considered to be tenants in common rather than as partners, unless there was evidence that a partnership was intended. Today the relationship between part-owners will normally be regulated by a partnership or management agreement.

2.41 The classic problem arising between co-owners concerning the employment of the ship is where the majority wish to send the ship on a particular voyage against the wishes of the minority, and the reverse situation where the minority are in possession and wish to send the ship to sea against the wishes of the majority. In the former case the minority owners bring a claim of restraint and in the latter case the majority owners bring a claim for possession which has been considered above.¹⁰²

Restraint

2.42 In a claim of restraint the minority owners arrest the ship until security is given to the full value of the minority interest in the ship¹⁰³ for her safe return. In The “Apollo” ¹⁰⁴ Lord Stowell said¹⁰⁵: “The bail bond contemplates no other object than the safe return of the vessel, or, in default thereof, the payment of the stipulated sum. That is the whole extent of the transaction upon which the parties and the Court are acting in this process.” Such security being provided, the ship is released to perform the voyage at the sole risk, expense and profit of the majority owners.¹⁰⁶ The minority owners neither contribute to the expenses of the voyage, nor do they share in the profits therefrom.¹⁰⁷ They also have no means of recompense for the ordinary wear and tear of the ship during the voyage, although it has been suggested¹⁰⁸ that there is no reason why the minority should not be paid for the use of their property. Should the ship be lost on the voyage, the court will normally order the immediate payment of the value of the security for the minority shares.¹⁰⁹ But where the security is forfeit, but the ship has not been lost, the minority owners are not allowed to retain their shares and must transfer them to the majority owners.¹¹⁰

2.43 Security can probably only be required for the safe return of the ship to the jurisdiction and not necessarily to the port from which she sailed, her port of registry¹¹¹ or any other particular port, since once the ship is again within the jurisdiction the parties are in the same position as before the voyage.¹¹² The security need not be limited to a single voyage, but the court may order that it be discharged where circumstances have changed since the claim was instituted.¹¹³ The court may also take a more flexible approach if it considers that the co-owner can be adequately protected by for example some insurance arrangements¹¹⁴ or by the granting of a mortgage of the shares of the other co-owner to secure the claim.¹¹⁵

Accounts

2.44 The court has power under this paragraph to settle any account outstanding and unsettled between the parties in relation to the ship, and to direct that the ship or any share thereof, be sold and to make such other order as the court thinks fit.¹¹⁶

2.45 Thus the court has power to order a claimant who has ceased to be a part-owner before the commencement of the claim to give security to the amount of his former interest in the ship.¹¹⁷ The court also has power to restrain a defendant in a co-ownership claim from dealing with the shares of the ship the subject of the claim.¹¹⁸ The court has power to appoint a receiver where this is just and convenient.¹¹⁹

2.46 Unlike an ordinary partner, the managing owner has a duty and is paid to render accounts¹²⁰ and so the rule in the Chancery Division regarding costs in partnerships claims¹²¹ is not followed in the Admiralty Court in co-ownership claims.¹²² The managing owner is entitled to include in the accounts a charge for his service in managing the ship.¹²³ The managing owner ought to insure the ship to a reasonable amount.¹²⁴ Co-owners are entitled to complete disclosure of all papers and books relating to the ship.¹²⁵

2.47 Where the managing owner does not acknowledge service in a claim in rem the court will join him as a defendant in order to compel him to produce accounts.¹²⁶

2.48 Although it has been held that the court will only take accounts to the date of the claim form,¹²⁷ it is suggested that this rule would not be followed today, and the court would settle accounts as they were outstanding at the date of the hearing.

Sale

2.49 The court has power to order sale at the suit of part-owners having only a minority interest even where this is opposed by the remaining owners,¹²⁸ but it is reluctant to order a sale against the wishes of the majority unless this is clearly in the interests of all the owners.¹²⁹ One solution has been for the value of the minority interest to be appraised and the majority owners given an opportunity to buy the minority shares.¹³⁰

2.50 Thus in The “Hereward”¹³¹ the majority co-owners formed a limited company to which they transferred their shares and the minority owners brought a claim for restraint and sought an order for appraisement and sale of the ship. Bruce J ordered the sale on the ground that this was beneficial in the interests of the parties generally, because the action of the majority was ruinous to the interests of the minority unless they agreed to come into the company. He said¹³²:

However, he directed that the order lie in the registry for four days to give time for the parties to come to terms and for the majority of the owners to decide whether they were willing to purchase the interests of the minority.

Possession of foreign ships

2.51 Where possession of a foreign ship is sought, although the English court has subject-matter jurisdiction to try the claim, an application to stay the claim on the ground of forum non conveniens (where permitted under Regulation 44/2001) is likely to be successful in the absence of some substantial connection with England.¹³³

(c) Any claim in respect of a mortgage of or charge on a ship or any share therein¹³⁴

2.52 This paragraph covers all mortgages and charges, whether registered or not, and whether legal or equitable, including mortgages and charges created under foreign law.¹³⁵

“Mortgage”

2.53 Historically a mortgage was the transfer of property as security for a debt. However, in modern law a ship mortgage is typically a registered security interest, a registered charge. Mortgages of registered ships require certain formalities to be complied with and for the mortgage to be registered. Under English law, where such formalities are not complied with the courts may give effect to the intention of the parties to create a mortgage by recognising the transaction as an equitable mortgage. However, in civil law countries equitable interests do not exist as such and the effect of non-compliance with the necessary legal formalities will often be that no security interest at all is created so that there will be no in rem validity, even though there may be contractual rights which can be enforced in personam. Thus in The “Angel Bell”¹³⁶ an unregistered Panamanian mortgage was held to give rise to no rights in rem against the ship.

“Charge”

2.54 A charge is the appropriation of property to meet a debt and is distinguished from a mortgage in that no property passes to the chargee. It has been held that “charge” in the context of section 20(2)(c) means charge in the nature of a mortgage.¹³⁷ In a Canadian case¹³⁸ it was argued that this provision was wide enough to include a claim for container rental in a container leasing agreement which granted a lien on all the vessels in the shipowner’s container fleet and their pending freight to cover outstanding liabilities.

(d) Any claim for damage received by a ship

2.55 This head includes damage done to a ship by something other than a ship, such as a pierhead¹³⁹ or a buoy.¹⁴⁰ It will also include a products liability claim against a manufacturer whose defective equipment has caused damage to a ship.¹⁴¹ Where damage has been received by a ship in collision with another ship, a claim cannot be brought against the cargo laden on board the wrongdoing ship, even if it belongs to the owner of the wrongdoing ship.¹⁴²

(e) Any claim for damage done by a ship

2.56 In The “Eschersheim”¹⁴³ Lord Diplock said¹⁴⁴:

The following are the judicial comments upon the phrase “damage done by a ship” that Lord Diplock probably based his dictum on:

2.57 Thus if damage is done by the wrongful act of the master and crew other than in the navigation or management of the ship in a physical sense the damage is not done by the ship.¹⁵² Furthermore, the claim must be for damage done, and not merely for damage resulting from or arising out of damage done.¹⁵³ However, the expenses incurred by the owners of a dock in and about the lighting, buoying, removal and destruction of a barge sunk in the dock by reason of a collision with a ship is “damage done by the ship” within this head.¹⁵⁴

2.58 The damage done need not be physical damage, so that a claim arising from the deliberate action of a vessel to prevent another vessel from fishing which results in financial loss will be within this head of jurisdiction on the assumption that the claimants have a cause of action in tort for such financial damage.¹⁵⁵

2.59 Cases held to have been within this head include the following:

• (i) damage by collision due to faulty steering gear¹⁵⁶;
  
• (ii) damage to a telegraph cable by the mate cutting it¹⁵⁷;
  
• (iii) damage by collision with an anchor¹⁵⁸;
  
• (iv) damage by a falling derrick¹⁵⁹;
  
• (v) damage done to a wreck¹⁶⁰;
  
• (vi) damage caused by ship’s wash¹⁶¹;
  
• (vii) damage done by putting by.¹⁶²

2.60 The following cases have been held not to be within this head: a claim for personal injuries as a result of falling into the hold of a ship¹⁶³ and a claim for damage to cargo on board the carrying ship.¹⁶⁴ In The “Rama”¹⁶⁵ impecunious shipowners who had previously defaulted on a mortgage chartered their ship and 95 per cent of the freight was paid after sailing. Charterers were persuaded to advance funds for bunkers, agency expenses and replacement parts, but the vessel never reached her destination and the cargo had to be transshipped. The charterers’ claims for deceit, negligent misrepresentation breach of charterparty and conversion were all held not to be claims for damage done by the ship. After reviewing the authorities Clarke J held¹⁶⁶ that for damage to be damage done by a ship three criteria must be satisfied: “1. the damage must be caused by something done by those engaged in the navigation or management of the ship in a physical sense; 2. the ship must be the actual or noxious instrument by which the damage is done; and 3. the damage must be sustained by a person or property external to the ship.”

Oil pollution

2.61 This paragraph also extends to any claim in respect of liability incurred under Chapter III of Part VI of the Merchant Shipping Act 1995¹⁶⁷ and any claim in respect of a liability falling on the International Oil Pollution Compensation Fund, or on the International Oil Compensation Fund 1992, or on the International Oil Pollution Compensation Supplementary Fund 2003, under Chapter IV of Part VI of the Merchant Shipping Act 1995.¹⁶⁸

2.62 The liability provisions of Chapter III of Part VI of the 1995 Act¹⁶⁹ are as follows:

2.63 It should be noted that section 153 of the Merchant Shipping Act 1995 applies to “any ship constructed or adapted for carrying oil in bulk as cargo”¹⁷¹ and where such a ship is also capable of carrying other cargoes besides oil¹⁷² section 153 applies while the ship is carrying oil in bulk as a cargo and while it is on any voyage following the carriage of oil unless it is proved that no oil cargo residues remain on board.¹⁷³ There is liability under section 153 not only for damage within the United Kingdom, but also for damage in any Convention country.¹⁷⁴ Section 154 of the 1995 Act applies to ships other than those to which sections 153 and 153A apply, including non-seagoing vessels,¹⁷⁵ and provides for liability only for damage within the United Kingdom.

2.64 The strict liability provisions of sections 153, 153A and 154 of the 1995 Act are mitigated to a limited extent by the exceptions contained in section 155. The defence of “exceptional, inevitable and irresistible natural phenomenon” appears to be very limited in its scope having regard to the twin requirements of “exceptionality” and “irresistibility”. It has been suggested¹⁷⁶ that the exception would not include hurricanes, but would include tidal waves. It has also been suggested¹⁷⁷ that in order to rely upon this exception it would have to be established that in no circumstances would the accident have been avoided by anyone.

2.65 The liability of the Fund is governed by section 175 of the 1995 Act which provides:

Maritime lien

2.66 A claim for damage done by a ship gives rise to a maritime lien,¹⁷⁸ but not where the claim arises under the Nuclear Installations Act 1965 (as amended by the Nuclear Installations Act 1969) in connection with an occurrence relating to the carriage of nuclear matter in a ship.¹⁷⁹

(f) Any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment, or in consequence of the wrongful act, neglect or default of—

(i) the owners, charterers or persons in possession or control of a ship; or

(ii) the master or crew of a ship, or any other person for whose wrongful acts, neglects or defaults the owners, charterers or persons in possession or control of a ship are responsible, being an act, neglect or default in the navigation or management of a ship, in the loading, carriage or discharge of goods on, in or from a ship, or in the embarkation, carriage or disembarkation of persons on, in or from the ship

Master

2.67 “Master” has the same meaning as in the Merchant Shipping Act 1995 and includes every person (except a pilot) having command or charge of a ship, and, in relation to a fishing vessel, means the skipper.¹⁸⁰

Defective ship, apparel or equipment

2.68 A claim may be brought under this head not only in respect of personal injury or loss of life suffered by persons on board the defective ship, but also in respect of personal injury or loss of life suffered by a person on another ship¹⁸¹ or ashore.

2.69 It was held by the House of Lords in The “Derbyshire”¹⁸² that a ship can be “equipment” provided by the shipowners for the purpose of their business within the meaning of section 1 of the Employer’s Liability (Defective Equipment) Act 1969. Thus where a seaman suffered personal injury or loss of life in consequence of the unseaworthiness of the ship which is attributable wholly or in part to the negligence of a third party, the shipowner will be liable, the negligence of the third party being deemed attributable to the shipowner as the seaman’s employer.

Wrongful act, neglect or default etc.

2.70 This head is very broad and will cover most personal injury or loss of life claims arising in connection with a ship. Thus in The “Maid of Kent”¹⁸³ a pilot was killed when his pilot launch rolled against the side of the ship he was boarding due to the wash of a passing ship and his widow and estate brought a claim in rem against the passing ship. It also covers more obvious cases such as injuries to a seaman caused by the master using automatic steering and ordering men to work on the foredeck in very bad weather,¹⁸⁴ or injuries allegedly caused by a list on the ship due to the improper working of coal from the bunkers.¹⁸⁵ This phrase is wide enough to include claims for negligent breach of contract.¹⁸⁶

Loss of life

2.71 Where a foreigner is killed on board a foreign ship as a result of a collision with another foreign ship in international waters, his dependants may bring a claim under the Fatal Accidents Act 1976.¹⁸⁷

Indemnity in respect of statutory compensation

2.72 It has been held that the Admiralty jurisdiction does not extend to claims for indemnity in respect of statutory compensation paid for loss of life.¹⁸⁸ While such a claim is probably not within this particular head of jurisdiction, such a claim could form part of a claim for damage done by a ship for which subject-matter jurisdiction is provided for by section 20(2)(e) of the SCA 1981. It is suggested that such a loss ought to be recoverable as part of the shipowner’s damages, it being difficult to see why such a claim should be held to be too remote.¹⁸⁹

(g) Any claim for loss of or damage to goods carried in a ship

2.73 Although “goods” includes “baggage”,¹⁹⁰ “baggage” has been held to include passengers’ baggage only and not to include the master or crew’s personal effects.¹⁹¹ It is difficult to see why a distinction should be drawn between the personal belongings of passengers and the personal belongings of those employed on board. They would both in common parlance be referred to as “baggage”, and there is no policy ground for any distinction. It must therefore be doubted whether this decision would be followed.

No maritime lien

2.74 There is no maritime lien for a claim for loss of or damage to goods carried on board a ship,¹⁹² but if the loss or damage was caused by damage done by a ship, e.g. on collision then the maritime lien for damage will apply.

(h) Any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship

2.75 The language of this subparagraph is wide enough to cover claims, whether in contract or in tort arising out of any agreement relating to the carriage of goods in a vessel,¹⁹³ and it is not necessary that the claim in question be directly connected with some agreement for the carriage of goods in a ship or for the use or hire of a ship or that the agreement be one made between the two parties to the claim.¹⁹⁴ The phrase “arising out of” is in this context to be given the broader meaning of “connected with” and not the narrower meaning of “arising under”.¹⁹⁵ However, a claim will only fall within this head of jurisdiction if the claim arises out of an agreement relating to carriage in a particular vessel, and it does not cover claims relating to carriage in unidentified vessels.¹⁹⁶

2.76 As well as claims obviously within this head, such as claims for damages for breach of a charterparty,¹⁹⁷ freight and demurrage¹⁹⁸ and damages for breach of a bill of lading contract,¹⁹⁹ it is also wide enough to cover the following:

• (i) a claim in negligence brought by sub-sub-charterers against shipowners for costs and expenses incurred as a result of the vessel having loaded so much cargo that she exceeded the permitted arrival draughts at her discharge port²⁰⁰;
  
• (ii) a claim in negligence or deceit for the ante-dating of bills of lading²⁰¹;
  
• (iii) a claim under an agreement for the mooring and unmooring of a vessel²⁰²;
  
• (iv) a claim against salvors under an agreement for salvage services²⁰³;
  
• (v) a claim by stevedores²⁰⁴;
  
• (vi) a claim for damages for breach of a towage contract²⁰⁵;
  
• (vii) a claim for an indemnity against shipowners under a towage contract for the loss of a tug²⁰⁶;
  
• (viii) a claim for the wrongful detention of goods²⁰⁷;
  
• (ix) a claim for contribution or indemnity under the Civil Liability (Contribution) Act 1978 arising out of a contract for the carriage of goods in a ship²⁰⁸;
  
• (x) a claim for damages for negligent misstatement by the master to sub-voyage charterers as to the cargo capacity of the ship.²⁰⁹

It is probably wide enough to cover a claim under a management agreement providing that the managers were solely entitled to enter into charterparties for the owners.²¹⁰

2.77 However, it is not wide enough to cover the following:

• (i) a claim for breach of an undertaking by shipowners to use their best endeavours to ensure that cargo owners provide salvage security before the cargo is released²¹¹;
  
• (ii) a claim for non-payment of container hire under a container leasing agreement²¹²;
  
• (iii) a claim for non-payment of insurance premia on a policy over goods to be carried by sea²¹³;
  
• (iv) a claim by brokers for commission under a charterparty²¹⁴;
  
• (v) a claim by brokers for commission under a sale and purchase agreement for a ship²¹⁵;
  
• (vi) a claim for demurrage under a contract to load a ship within a specified time²¹⁶;
  
• (vii) a claim for demurrage under a cif contract²¹⁷;
  
• (viii) a claim for rent of land used as a container handling terminal²¹⁸;
  
• (ix) a claim for fees payable under a priority berthing licence.²¹⁹
  
• (x) a claim upon an arbitration award made under an arbitration clause in a charterparty.²²⁰

No maritime lien

2.78 Claims under this head of jurisdiction do not give rise to a maritime lien.

(j) Any claim—

(i) under the Salvage Convention 1989;

(ii) under any contract for on in relation to salvage services; or

(iii) in the nature of salvage not falling within (i) or (ii) above;

or any corresponding claim in connection with an aircraft²²¹

2.79 This paragraph is considerably wider in scope than its predecessor which referred only to “claims in the nature of salvage”. The former wording had been held not to cover a claim against salvors for negligence during the salvage operation, although such a claim had been held to be within paragraph (h).²²² A claim by salvors for breach of clause 5 of Lloyd’s Open Form (1990)²²³ against the shipowners for failing to use their best endeavours to obtain security from cargo owners before cargo was released had also been held not to be a “claim in the nature of salvage” and not to fall within sub-paragraphs (g) or (h).²²⁴ A claim to enforce an arbitration award under Lloyd’s Open Form had been held to be a claim in the nature of salvage not only in so far as the principal award together with interest is concerned, but also that part of the award relating to the costs of the arbitration.²²⁵

2.80 The phrase “any claim under any contract for or in relation to salvage services” includes any claim arising out of such a contract whether or not arising during the provision of the services.²²⁶ Accordingly, claims of the type considered in The “Eschersheim” and The “Tesaba” will now fall within this paragraph.

2.81 The Admiralty Court has an inherent jurisdiction to protect the interests of salvors during the course of conducting salvage operations.²²⁷

Common law definition of salvage

2.82 In The “Cythera”²²⁸ the following definition of salvage contained in Kennedy’s Civil Salvage (5th edn., 1985) was adopted by MacFarlan J in the Supreme Court of New South Wales²²⁹:

The essential prerequisites for a claim to be salvage at common law are therefore:

• (a) that it concerns a recognised subject of salvage;
  
• (b) that the property was in danger;
  
• (c) that the services were voluntary;
  
• (d) that the services were successful.

Recognised subjects of salvage

2.83 After a thorough review of the authorities Lord Esher MR came to the following conclusion regarding the subjects of salvage in giving the judgment of the Court of Appeal in The “Gas Float Whitton No. 2″²³⁰ which was approved by the House of Lords²³¹: “I come, therefore, to the conclusion that by the common or original law of the High Court of Admiralty the only subjects in respect of the saving of which salvage reward could be entertained in the Admiralty Court were ship, her apparel and cargo, including flotsam, jetsam and lagan, and the wreck of these and freight . . . ” To these subjects must be added those which have been made subject of salvage by statute, those are: lives,²³² aircraft²³³ and hovercraft.²³⁴

Danger

2.84 In The “Charlotte”²³⁵ Dr Lushington said²³⁶ in a passage that was subsequently approved by the Privy Council in The “Strathnaver”²³⁷: “It is not necessary, I conceive, that the distress should be actual or immediate, or that the danger should be imminent and absolute; it will be sufficient if, at the time assistance is rendered, the ship has encountered any damage or misfortune which might possibly expose her to destruction if the services were not rendered.” This passage was explained by Sir Boyd Merriman P. in The “Mount Cynthos”²³⁸ as being a real possibility and not a fanciful possibility. In The “Phantom”²³⁹ Dr Lushington said²⁴⁰: “I am of opinion that it is not necessary there should be absolute danger in order to constitute a salvage service; it is sufficient if there is a state of difficulty, and reasonable apprehension.”

2.85 The danger need not be physical as Willmer J noted in The “Glaucus”²⁴¹: “It is no use saying that this valuable property, worth something approaching a million pounds, is safe, if it is safe in circumstances where nobody can use it. For practical purposes, it might just as well be at the bottom of the sea.”

Voluntariness

2.86 In order to be a salvor, the person rendering the salvage services must be a volunteer in the sense of not being under any pre-existing duty to provide the service. Lord Stowell expressed this requirement in the following words in The “Neptune”