NEW ZEALAND MARITIME LAW

Doby Navigation Co Ltd v The Ship "ANL Progress"

IN THE HIGH COURT OF NEW ZEALAND

IN ADMIRALTY

AUCKLAND REGISTRY

AD. 1/02

ADMIRALTY ACTION BOTH IN REM AND IN PERSONAM

BETWEEN DOBY NAVIGATION COMPANY LTD of 41 Them. Dervis Street, 8th Floor, Office 807, Nicosia, Cyprus, Shipowner
Plaintiff

AND THE SHIP "ANL PROGRESS" (FORMERLY "STARSHIP") A CONTAINER-FITTED GENERAL CARGO SHIP REGISTERED TO THE PORT OF Limassol, Cyprus
First Defendant

AND JENOVEN R. MODEQUILLO, Third Engineer, NOEL F. SAURA, Oiler, and ALEXIS A. GAJO, Oiler at sea
Second Defendants

Hearing: 19 February 2002

Counsel: J. R. Gresson for Plaintiff
J.W. Tizard for Second Defendants

Judgment: 20 February 2002

JUDGMENT OF SALMON J.

Solicitors: Norton White, PO Box 6623, Wellesley Street, Auckland (Fax: 09 302 8393)
Oakley Moran, PO Box 241, Wellington. (Fax: 04 472 6657)

[1] In these proceedings the plaintiff, which is the owner of the first defendant's ship, seeks relief relating to the second defendants, who have all been employed on board the ship. The notice of proceedings in rem and in personam contains endorsements in the following terms:

Endorsements to be made on Notice of Proceeding before Issue

The plaintiff claims possession of first defendant the ship "ANL Progress", pursuant to sections 4(1)(a) and 5(2)(a) of the Admiralty Act 1973. The first defendant is being unlawfully occupied by the second defendants in breach of the plaintiff's rights of ownership and possession.

The plaintiff claims against the second defendants under sections 4(1)(a), 4(1)(e), 4(1)(s), and 4(2) of the Admiralty Act 1973. The second defendants are unlawfully in occupation of the first defendant, in breach of the plaintiff's rights of ownership and possession, and are thereby liable to the plaintiff for trespass, conversion and barratry.

[2] By way of ex parte interlocutory application the plaintiff seeks the following orders:

1. FOR release of the first defendant from the second defendants' maritime lien in respect of any unpaid wages or other service-related entitlements, upon payment into Court of the sum of US$15,760.00, and such further sum (if any) for interest and costs as the Court directs.

2. THAT the second defendants depart from the first defendant forthwith upon payment of the sum of US$2,356.82 to the second defendant Jenoven R. Modequillo, and the sum of US$1,872.68 to the second defendant Noel F. Saura, and the sum of US$2,067.43 to the second defendant Alexis A. Gajo, together with conduct money for transport to the nearest international airport, and upon presentation to them of flight tickets to Manila, Philippines.

3. THAT the funds referred to in order 1 above to be paid into Court by the plaintiff be placed on interest bearing deposit, pending further order of the Court.

4. FOR costs of and incidental to this application.

[3] In support of its application the plaintiff has filed an affidavit sworn by Timoteo Arnio, the Master of the first defendant's ship.

[4] This ex parte application was heard by me with Mr Tizard appearing on a "Pickwick" basis. The Court is grateful to Mr Tizard for the assistance he was able to provide at very short notice.

[5] A notice of appearance to protest jurisdiction has been filed on behalf of the second defendants, together with a notice of opposition to the ex parte application and several affidavits.

[6] The objection to jurisdiction cites the following grounds:

2.1 The proper law governing the employment contracts which underlie this dispute is the law of Cyprus.

2.2 One of the contracts relied upon by the Plaintiff requires that disputes about the contract be settled in the courts of Cyprus.

2.3 In the alternative, the dispute between the parties arose in Melbourne, Australia, and steps have been taken by both the Plaintiff and Defendants to resolve or determine the matter within that jurisdiction.

[7] The notice of opposition opposes the making of the orders sought by the plaintiff on the grounds:

1. The Second Defendants have not purported to exercise and do not presently intend to exercise their right to a maritime lien in respect of wages and other service related entitlements.

2. Each of the Second Defendants is a party to an employment agreement with the Plaintiff which has not yet expired and the terms of which are now disputed by the Plaintiff.

3. The Second Defendants are not unlawfully in occupation of the First Defendant but are entitled to be and remain on board pursuant to their respective employment agreements with the Plaintiff.

4. The Second Defendants are not liable to the Plaintiff in conversion, trespass or barratry.

5. There is no urgency to have the dispute between the Plaintiff and the Second Defendants determined by this Court.

6. The balance of convenience lies with the Second Defendants and preserving their right to be and remain on board until the First Defendant berths in Melbourne.

7. It is in the interest of justice that no orders be made in favour of the Plaintiff.

8. The filing of this notice of opposition is without prejudice to the Second Defendant's Notice of Appearance Under Protest to Jurisdiction.

[8] The first defendant is presently under charter. It is trading between Australia and New Zealand. The three second defendants are Filipino nationals. The firstnamed second defendant, Mr Modequillo is the third engineer on the ship, the other two second defendants are employed as engine room oilers. Mr Modequillo has been on the ship since 14 February 2001, Mr Saura since 20 June 2001 and Mr Gajo since 23 July 2001. Mr Saura and Mr Gajo signed an employment contract in a very brief form which specifies that wages and duration of the contract are "as per CCA".

[9] CCA the Court is informed, stands for Collective Agreement for Seamen aboard Cyprus cargo and tanker vessels for Cyprus beneficially owned vessels. Captain Arnio's affidavit annexes a copy of that collective agreement. Mr Modequillo's contract is expressed to be under the Cyprus Collective Agreement. It has special terms annexed to it. Those special terms and the collective agreement declare that any dispute arising between the seamen and owners under the contract will be resolved exclusively by the Courts of Cyprus and in accordance with Cyprus law.

[10] The collective agreement provides that the duration of engagement of seamen is fixed at eight months. That engagement may be extended by one month or reduced by one month at the ship owner's option for operational convenience. On that basis Mr Modequillo's contract expired in October 2001, or November if it was extended. Mr Saura's expires on 22 February 2002 or 22 January if the one month reduction is applied and Mr Gajo's on 22 March or 22 February 2002, if the one month reduction is applied. It will be noted that that reduction can only be applied for "operational convenience". Mr Modequillo claims that his contract was for a year and expired in February of this year. He says that he sought, and was granted, a six month's extension to that contract. On his behalf a document was produced which he says was his application for that extension.

[11] All three defendants claim that their contracts were for 12 months and refer in that regard to the provisions of a Philippines Collective Agreement, a copy of which has not been provided to the Court.

[12] A dispute between the plaintiff and the members of the crew over wages arose when the ship was in Australia. The Court is advised that that dispute is already before the Courts in Melbourne. The three second defendants are parties to that dispute and claim that the plaintiff has not paid them the wages to which they are entitled. A sum of money sufficient to cover the amount in dispute relating to all the seamen involved has been deposited in Melbourne.

[13] Captain Arnio's affidavit annexes a considerable amount of information relating to wages and the plaintiff's position is that all seamen have been paid the amounts to which they are entitled. On the information before the Court at this stage it is quite impossible to reach any final view, or even any tentative view on that issue.

[14] As to the term of employment, the documents annexed to the captain's affidavit certainly suggest that the plaintiff is correct in saying that the Cyprus agreement applies and that the duration of engagement is as set out in that document. On the other hand, Mr Modequillo's application for extension suggests that he at least, believed that his term of employment was for 12 months.

[15] Whatever the position in that regard, what is clear is that there is a dispute which the Court cannot resolve at this stage as to whether Mr Modequillo's term of employment has been extended. Mr Gajo's term of employment does not expire at the earliest, before 22 February. That is important because the Court is instructed that the ship will leave New Zealand waters today, 20 February. On the information available Mr Saura's contract appears to have expired if the ship owners can claim the reduction for operational convenience, otherwise it too does not expire until after the ship has left New Zealand waters.

[16] The dispute between the seamen and the owners of the ship has continued in New Zealand with discussions being held between union representatives and the owners' representatives in Auckland and in Wellington. In affidavits filed it is claimed by one of the union representatives that Mr Gresson gave an undertaking that no steps would be taken in relation to the three defendants until the ship returned to Australia. Mr Gresson was somewhat embarrassed by that allegation because it came at a time when it was too late for him to abandon his position as counsel and to make an affidavit, but he advised the Court as counsel that that allegation was disputed.

[17] Against that factual background Mr Gresson argues that the three second defendants' terms of employment have all ceased or are about to cease and that the seamen are entitled by operation of law to a maritime lien for their wages. He submits that that enables the plaintiff to obtain an order from the Court releasing the first defendant from that lien upon payment into Court of an amount sufficient to cover the dispute between the plaintiff and the second defendants and that, as a matter incidental to that order, the Court should require the second defendants to depart from the first defendant vessel upon payment to them of amounts which the plaintiff concedes are payable, together with conduct money for transport to the nearest airport and flight tickets back to the Philippines.

[18] He relies in support of his propositions on Rule 180 of the High Court Rules which applies where there is a claim to recover property subject to a lien. The Court may in such circumstances order that the party claiming the property pay into Court an amount of money sufficient to satisfy the lien, and that upon such payment the property be delivered up to the party claiming it. He also claims that the Court has either a general jurisdiction under Rule 767 or inherent jurisdiction to order the departure of the second defendants from the first defendant where there is prejudice to the plaintiff, but no advantage or necessity on the part of the second defendant. Rule 767 applies to Admiralty proceedings; paragraph 1 of that Rule provides:

If a party or intending party wishes to take a step in a proceeding and the manner and form of the procedure is not prescribed by this part or any other part or by the general practice of the Court that party may apply to the Court or a Judge for directions.

[19] In my view the Court would not have jurisdiction under that Rule to make the order sought by the plaintiff. It is concerned with procedural matters. An order that the second defendants depart the ship, does not in my view, fall into that category.

[20] Mr Gresson submits that the jurisdiction of the Court to order the departure of seamen from the ship was tacitly accepted by Giles J. in Partenreederei MS Takitimu v The Ship, Takitimu and Others (unreported, High Court, Auckland Registry, AD.882/98, 23 March 1998). I do not consider that that judgment supports Mr Gresson's proposition. It was dealing with a situation where the parties had reached agreement as to the appropriate course to follow.

[21] Captain Arnio's affidavit records that he was instructed by the owners to sign off the three second defendants when the ship arrived in Auckland on 16 February. Arrangements were made to fly the signed off men to their home. The men refused to complete Customs and Immigration documentation or to leave the ship. He claims that the continued presence of the three men is operationally unnecessary. They are surplus to requirements for safe and efficient working of the ship. He says that their continued presence is an unnecessary on-going cost for the owners and is bad for the harmonious, efficient and safe operation of the ship. He says it is undesirable for the morale of the whole ships' company to have on board men who are known to be in dispute with owners.

[22] On the basis of those propositions, Mr Gresson submits that there is prejudice to the plaintiff in having the men on board, but no prejudice to the men if they are removed so long as their wages are secured.

[23] I do not accept these submissions on behalf of the plaintiff. It is clear from the evidence that these men have been singled out from a greater number, all of whom are in dispute with the ship over the amount of wages which they say should be paid to them. That issue is already before the Courts in Australia. Neither the balance of convenience nor the justice of the case support the plaintiff in relation to the seeking of this interim order.

[24] Whilst it is not necessary to finally determine the issue, I record that I have serious doubts as to whether the Court in any case has jurisdiction to make the orders sought by the plaintiff.

[25] First, I do not accept that it can be said that the men are in "possession" of the ship as that term is used in s.4(1)(a) and (b) of the Admiralty Act 1973.

[26] As to the proposition that a lien be discharged, the fact of the matter is that no lien has been claimed. Mr Gresson argues that the lien arises by operation of law. I accept that that is so, and I also accept that by virtue of s.28 of the Maritime Transport Act 1994 members of the crew of a ship are prohibited from contracting out of their right to that lien. However, I do not accept that a dispute arises unless a lien is claimed by those entitled to it. I also doubt this Court's jurisdiction to order that the men leave the ship or even to make a declaration that their employment contract is at an end. There is the provision in the contract giving exclusive jurisdiction to the Courts and the law of Cyprus. So far as New Zealand law is concerned, there is a real question as to whether the Employment Relations Act 2000 would give exclusive jurisdiction to make orders relating to the question of whether men remain employed, to the Employment Court. Finally, there is in this case, the fact that the issue is already before the Courts in Australia.

[27] There is one further consideration. The Admiralty Court has always adopted a benevolent and protective attitude towards seamen to avoid over-reaching by ship owners. Many years ago in The Minerva (1825) 1 Hag. 347 Lord Stowell referred to the disparity of bargaining power between owners and seamen as follows:

On the one side are gentlemen possessed of wealth, and intent, I mean not unfairly, upon augmenting it, conversant in business, and possessing the means of calling in the aid of practical and professional knowledge. On the other side, is a set of men, generally ignorant and illiterate, notoriously and proverbially reckless and improvident, ill provided with the means of obtaining useful information, and almost ready to sign any instrument that may be proposed to them; and on all accounts requiring protection, even against themselves.

[28] It would not, of course, be fair to describe seamen in those terms now. Also their position has changed by virtue of the fact that they have the protection of unions. Nevertheless, the third defendants in this case are Filipinos, far from home. There is obviously a disparity of power between them and the owners of the ship. It is appropriate to continue to adopt a benevolent and protective attitude.

[29] The application is dismissed. The second defendants are entitled to costs to be calculated on the basis of Category 2 Band B and to disbursements to be fixed, if necessary by the Registrar. If the parties cannot agree on costs, the matter may be referred back to the Court.