Nassau Island Development Company Ltd v The Owner of the Ship “Blessed 3” aka “Blessed 300” and Grand Bahama Shipyard Company Ltd

JurisdictionBahamas
CourtCourt of Appeal (Bahamas)
JudgeDame Anita Allen, P,The Honourable Dame Anita Allen, P,The Honourable Mr. Justice Adderley, JA,The Honourable Ms. Justice Crane-Scott, JA
Docket NumberSCCivApp No. 63 of 2011
Date14 December 2017

COMMONWEALTH OF THE BAHAMAS

IN THE COURT OF APPEAL

Before:

The Honourable Dame Anita Allen, P

The Honourable Mr. Justice Adderley, JA

The Honourable Ms. Justice Crane-Scott, JA

SCCivApp No. 63 of 2011

SCCivApp No. 64 of 2014

Admiralty Action in Rem Against the Ship “Blessed 3”

Between
Nassau Island Development Co. Ltd
Plaintiff/Appellant
and
The Owner of the Ship “Blessed 3” aka “Blessed 300”
Defendant/Respondent

and

Grand Bahama Shipyard Co. Ltd
Caveator/Respondent
APPEARANCES:

Mr. Darren Ellis, Counsel for Appellant

Mrs. Kendra Paris-Whittaker with Mr. Jacy Whittaker, Counsel for the Respondent

Civil Appeal — Admiralty — Arrest — Judgment Debt — Dock Fees — Priority Payments — Merchant Shipping Act, Ch.268

In August 2010 it was ordered by consent that the ship Blessed 3 be sold for $451,000.00. The caveator/respondent subsequently sought and successfully obtained a variation of the Consent Order. Post the variation a priorities hearing was held and a ruling rendered. The Plaintiff/Appellant appeals both the variation and priority rulings.

Held:- both appeals are allowed, the purported variation of the Consent Order dated August 26, 2010 is set aside, all payments by the Admiralty Marshall made pursuant to the Consent Order and set out in his Affidavit filed on 26th October 2014 are affirmed, costs in the actions below and the appeal are the appellant's to be taxed if not agreed.

per Allen, P

The learned judge was factually wrong to hold as he did in the May 4th ruling that the appellant was paid $188, 322.40 from the proceeds of sale, as opposed to the claimed $71,280.00 in its Statement of Claim. It appears that the learned judge misunderstood the dual role played by the appellant as both judgment debtor for services provided to the defendant/respondent pre the arrest of the ship and as a third party service provider to the Admiralty Marshall.

The affidavit evidence of the Admiralty Marshall and the Deputy Admiral Marshall clearly demonstrate that as a result of the arrest of the ship dockage fees were incurred during the 16 months the ship was under arrest. It was therefore unreasonable for the learned judge to have stated at paragraph 26 of his ruling that it defied logic for the plaintiff to submit that the Caveator or even the Admiralty Marshall ought to have known of the existence of the dockage fees.

Section 281 of the Merchant Shipping Act is clear. Any costs arising from the arrest of a ship have priority over all claims. Docking fees during the period of arrest clearly fall within this category of priority expenses; as such the learned judge erred when he ruled, at paragraph 30 of the May 4th 2011 ruling that the payment made to the appellant was irregular as they did not comply with the Merchant Act.

With this determination the majority of the remaining grounds of appeal become academic; as the funds remaining post the settlement of the Admiralty Marshall expenses are insufficient to cover either the appellant's judgment debt or the caveator/respondent's charges.

It is clear from the transcript of proceedings that the procedure stipulated at sub (2) for making a personal costs order against an attorney was not followed. In light of this the learned judge's holding at paragraph 17 of the Priorities ruling namely, that Counsel for the appellant is to pay one half of the Caveator's costs is set aside.

Judgment Delivered by the Honourable Dame Anita Allen, P

1

This is a combined appeal of two decisions of the Hon. Mr. Justice Stephen Isaacs dated May 4 th 2011 (Consent Order Ruling) and May 24th 2013 (Priorities Ruling). The Consent Order Ruling, modified the consent order entered between the parties on August 26 th, 2010 to read that “… the Plaintiff's legal fees and fees incurred by and on behalf of the Admiralty Marshall in the amount of $232, 339.00 are to be deducted from the sale price and legal fees to be taxed if not agreed.” The Priorities Ruling affirmed the Consent Order ruling and further solidified the holding that the appellant's claim ranks in pari passu, with that of Grand Bahama Shipping Company LTD (GBSL).

Background
2

The appellant is a Bahamian Company engaged in the business of dredging, aragonite and sand mining and related shipping services. In the spring of 2009 the appellant commenced admiralty proceedings by way of a writ of filed on April 6 th; seeking to recover monies due for work and services provided to the vessel “Blessed 3” aka “Blessed 300” (“the ship”); namely loading and unloading services with respect to sand products, docking facilities and re-payment of certain disbursements for the said vessel.

3

On April 7 th 2009, following the order of Isaacs J, a warrant for the arrest of the ship was issued. The Admiralty Marshall thereafter arrested the ship. On May 21 st, 2009 a statement of claim filed by the appellant set out their particulars of claim. They are as follows:-

Particulars

  • 1. Dockage fees for the period August 2008 to April 6 th 2009 – $71,280.00

  • 2. Loading of barge, rental of loader and dump trucks (31/12/08) — $27, 998.42

  • 3. Unloading of barge, rental of loader and dump truck (13/3/09) — $27, 998.42”

4

Subsequent to the filing of the Statement of Claim, Isaacs J granted an order on August 10 th, 2009, for the appraisal and sale of the vessel. Judgment in default of defence was granted, on 10 August 2009, to the appellant in the sum of $127,276.84. Following this on September 4 2009 Benjamin Ferguson, the Deputy Admiral Marshall, swore an Affidavit stating as follows:-

  • “1. That the vessel which is the subject of this action has been under arrest since 7th April, 2009.

  • 2. That since that date daily dockage and security fees have been incurred.

  • 3. That pursuant to the Order of the Court made herein on 10th August, 2009 I have solicited an appraisal on the said vessel. I now produce and annex hereto as Exhibit BF1 a copy of the said appraisal.”

5

The Condition & Appraisal Survey Report exhibited to the said Affidavit gave the fair market value of the ship as $850,000.00 Bahamian Dollars as at August 16, 2009.

6

On January 18 th, 2010 the Court granted the Admiralty Marshall permission to sell the ship and/or conduct a private auction of the same. Some six months later, on July 2 nd 2010, a praecipe for caveat was entered by Grand Bahama Shipyard Ltd, the caveator/respondent. The praecipe asserts that, “… the intending Caveator claims to have a right of action in rem against the above-mentioned property or the proceeds of sale for repairers rendered in the approximate amount of B$350,663.76 together with interest thereon and legal costs.”

7

On August 19 th 2010, Davis & Co., Counsel for the appellant filed a Summons on behalf of the appellant seeking, “an Order approving the sale of the ship to James Curling of Tycoon Management or his assigns upon terms stated in the Affidavit of the Admiralty Marshall filed herewith.” The terms averred to in that Affidavit are pertinent to the determination of this appeal and as such I set the Affidavit of Commander Patrick McNeil out in full. There he states:

  • “1. I am the Port Controller of the Commonwealth of The Bahamas and the Admiralty Marshall appointed in this cause by this Honourable Court in relation to the arrest and detention of the Barge Blessed 300. I make this affidavit from my own knowledge. The information made and contained herein are true and correct to the best of my knowledge information and belief.

  • 2. By Order dated January 18 th 2010 and filed herein on March 4 th 2010 I was ordered to advertise and seek the sale of the said vessel.

  • 3. Pursuant to the said Order I caused an advertisement to be issued seeking bids for the purchase of the said vessel. Four bids were received and I accepted the bid of Four Hundred and Fifty-One Thousand Dollars ($451,000.00) as indicated in the attached letter to Philip McKenzie which is now produced and shown to me as Exhibit PM1.

  • 4. I am satisfied that the offer is the best available in this market and having regard to the ongoing expenses being incurred to continue the arrest of the vessel the sale is depreciating considerably. The continuous security necessary to maintain the arrest for the past year now exceeds One Hundred and Eighty-Eight Thousand Twenty Dollars and Twenty-Nine Cents ($188,020.29). (Statement of Bahamas Maritime Connexion Limited is now produced and shown to me as Exhibit PM2.

  • 5. That I am aware that a Caveat has been filed in this matter on behalf of the Grand Bahama Shipyard.

  • 6. In the circumstances I strongly recommend that the Court approves the sale of the Barge Blessed 300 such that the judgment and expenses may be settled pursuant to the Order dated January 18 th, A.D., 2010.”

8

On August 26 th 2010 Isaacs J ordered, by consent, the sale of the Ship to Tycoon Management for the aforementioned sum. The Order provided that;

  • i. The Admiralty Marshall is Authorised to sell the barge “Blessed 3” aka “Blessed 300” to James Curling of Tycoon Management or his assigns for the sum of Four Hundred Fifty-one Thousand Dollars ($451,000.00) in the currency of the Commonwealth of the Bahamas and to execute all assurances he deems necessary;

  • ii. The judgment debt, Plaintiffs legal fees and fees incurred by and on behalf of the Admiralty Marshal are to be deducted from the sale price, and legal fees to be taxed if not agreed;

  • iii. The Admiralty Marshall is authorized to settle other proven claims against the defendant in accordance with the admiralty rules from the balance of the proceeds of sale;

  • iv. The Defendant reserves the right to an accounting of the proceeds of sale;

  • v. That the Defendant pays the plaintiff the costs of these proceedings.

9

On September 23 rd, 2010 the Caveator applied to the Court, by way of summons, for an Order setting aside the Consent Order of August 26 th, 2010 or...

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