Fearless I
Court of First Instance
Admiralty Action Nos 197 & 198 of 2012
Peter Ng J
Admiralty
2, 16 October 2013

Action in rem —nothing inequitable about wrongful arrestor bearing legal and financial consequences of own actions

Two vessels were first arrested by C in previous admiralty proceedings (the “Previous Proceedings”), in which the judge held that C’s claims as the assignee of the wages of the masters and crews of the vessels owned by the defendants (“Ds”) did not fall within the admiralty jurisdiction under Section 12A(2)(n) of the High Court Ordinance (Cap. 4) and set aside the writs in rem and warrants of arrest obtained by C against those vessels (see [2013] 2 HKLRD 620). In the meantime, the masters and crews, plaintiffs (“Ps”) in the present actions, issued admiralty writs in rem against the vessels in respect of their claims against the defendants (“Ds”) for wages for a different period.

P also obtained warrants of arrest. Ps subsequently entered judgment in default and obtained orders for the sale of the vessels, and the proceeds of sale were paid into court. C now sought, as intervener, reimbursement of its costs and arresting the vessels in the Previous Proceedings out of the sale proceeds in priority to all claims save those of the Chief Bailiff. C argued that, although it had no valid claims in rem against the vessels, it was the first arresting party and the producer of the sale proceeds for the benefit of all the creditors.

Held, dismissing the applications, that, inter alia:

C’s claim as assignee of the master and crew’s wages could only be brought as an in personam action by issuing and serving an in personam writ on Ds. C had no right to apply for a warrant of arrest against the vessels and no right to participate in the sale proceeds paid into court.

None of the authorities relied on by C supported its position that even a wrongful arrestor was entitled to his costs and expenses in arresting and maintaining the ship, so long as all the creditors derived some de facto benefit from the arrest was rejected. Further, the threshold for a shipowner of obtaining damages for wrongful arrest was notoriously high, namely crassa negligentia or gross negligence, implying malice or its equivalent.

Jurisdictions: 

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