Deosca Shipping Corporation v M.v the Lady D and Lloyd Deosca

• Jurisdiction: Jamaica
• Court: Supreme Court (Jamaica)
• Judge: Phillips, J.
• Judgment Date: 14 June 1961
• Date: 14 June 1961

Supreme Court

Phillips, J.A.

Deosca Shipping Corporation

and

M.V. the Lady D and Lloyd Deosca

Appearances:

Mahfood for the plaintiffs

Carberry for the defendants

Jurisdiction - Court of Admiralty — Mortgage of foreign ship — Submission to jurisdiction of the court by the defendant.

1 Phillips, J. This case involves primarily the jurisdiction of the Court of Admiralty in Jamaica to deal with matters relating to mortgages of foreign ships temporarily within the territorial waters of Jamaica.

2 The writ herein was filed on 7 December 1960, in the Admiralty Jurisdiction of the Court. The endorsement reads as follows:

3 ‘The plaintiffs’ claim is against the defendants to recover the principal sum of TWENTY-FIVE THOUSAND DOLLARS United States currency due and owing by the defendants to the plaintiffs under an instrument of mortgage dated the 19th day of August 1960.’

4 It was not disputed that the ship The Lady D was a foreign vessel registered in Panama and that the plaintiff is a foreign corporation incorporated under the laws of the State of New York in the United States of America and having its principal place of business at 92 Liberty Street, New York; that the defendant Lloyd DeOsca was not ordinarily resident or domiciled in Jamaica and is a naturalised American citizen; and that the transaction in issue, namely, the mortgage of the vessel, was a foreign transaction executed on 19 August 1960, in the Republic of Panama.

5 The plaintiffs' claim was:

6 'By mortgage dated the 19th day of August 1960, the defendant mortgaged to the plaintiffs the vessel together with all of the mast, bowsprit, boat, anchors, cables, chains, rigging, tackle apparel, furniture and all other necessaries thereunto appertaining and belonging to the vessel to secure an indebtedness of $25,000.

7 Under the said mortgage the defendant inter alia covenanted:

8 (a) to repay the said principal sum of $25,000 within a period of five years;

9 (b) to pay annually in the interim interest at the rate of six per centum;

10 (c) not to sell or attempt to sell the vessel or any part thereof;

11 (d) not to permit the said vessel to incur debts exceeding in the aggregate $10,000; and

12 (e) to keep the vessel insured against loss or damage by fire and against all marine risks and disasters in some good and responsible insurance company or companies to be selected and approved by the plaintiff company for an amount at least equal to the amount which shall from time to time remain unpaid under the said preferred mortgage.

13 Despite repeated demands made on behalf of the plaintiff company the defendant failed or neglected to make any payments in respect of interest as aforesaid.

14 The defendant has permitted debts to be incurred for the account of the vessel which aggregate an amount substantially in excess of $10,000.

15 The defendant has failed or neglected to effect the requisite or any insurance covering loss or damage to the vessel and the plaintiff company has been compelled to effect such insurance as will project its interest.

16 Contrary to the terms of the said mortgage and without the permission of the plaintiff company the defendant has sold or mortgaged a portion of the equipment of the vessel to wit an auxiliary engine part of the plant or machinery of the vessel and has failed to account for the proceeds of such sale or mortgage.

THE PLAINTIFFS CLAIM:

17 (a) Judgment for the said sum of $25,000.

18 (b) An Order for the appraisement and sale of the said vessel and/or foreclosure.

19 The ship was arrested with all due formalities on 12 December 1960, and the writ served on the ship and on the defendant Lloyd DeOsca on the same day, 12 December 1960.

20 Judgment was entered by default before Small J, against The Lady D and Lloyd DeOsca (the owner), the defendants, for the sum of $25,000 or the sterling equivalent, together with such further amount as might be certified on an account taken by the Registrar to be due and owing in excess of the $25,000. It was ordered that in default of the second defendant satisfying such amounts due the vessel should be sold at public auction and that failing such sale the said mortgage might, on the application of the plaintiffs, be enforced by foreclosure.

21 The Registrar certified that the amount due in excess of $25,000 was £1,141 16s 2d, which included the sum of £78 4s 3d, the plaintiffs' solicitors' taxed costs.

22 On 1 May 1961, the solicitor for the defendants entered appearance under protest for Lloyd DeOsca, owner of The Lady D.

23 On 1 May 1961, a notice of motion to set aside the writ and judgment was filed on behalf of the defendants. The grounds for setting aside the judgment were as follows:

1

The MV The Lady D is a foreign vessel registered in the state of Panama, and that the owner of the said vessel, and the plaintiffs in this action are all foreigners, being in the one case an American citizen and in the other a corporation duly registered and incorporated in the State of New York, and that this court has no jurisdiction inasmuch as the defendants have not consented to the jurisdiction nor has the state to which the vessel belongs given any consent to the bringing of this action. 2. Alternatively, that if this Honourable Court has any jurisdiction it has a discretion as to whether it will in these circumstances exercise such jurisdiction or not, and that this Honourable Court will refuse to exercise its jurisdiction (if any) in the circumstances of this case.

24 The matter came before me and the default judgment was set aside on terms.

25 The order was designed to achieve three results: (1) to release the ship upon the deposit into court of a sum equal to the amount admitted by the defendant (with incidental costs) and to prevent undue hardship. (The court was assured by counsel for the defendant Lloyd DeOsca that the sum of $10,000 could be raised and lodged into court); (2) to provide for the early determination of the issue of the jurisdiction of the court; and (3) to give directions as to the course of the proceedings in the event of the court deciding that it had jurisdiction to deal with the matter and exercising its discretion to hear the action on the merits.

26 The court then proceeded to hear the arguments of counsel on both sides.

27 It was argued on behalf of the defendants that in England prior to the year 1890 and the passing of the Colonial Courts of Admiralty Act, 1890 [UK], the admiralty jurisdiction of the High Court in England did not extend to the hearing of any claim in respect of the mortgage of a ship: that power was only given by the Supreme Court of Judicature (Consolidation) Act, 1925 [UK], s 22 (1) (a) (ix); that the jurisdiction of a Court of Admiralty in Jamaica was established by the Act of 1890 by s 2 (1) as follows:

‘Every court of law in a British possession, which is for the time being declared in pursuance of this Act to be a Court of Admiralty, or which, if no such declaration is in force in the possession, has therein original unlimited civil jurisdiction, shall be a Court of Admiralty, with the jurisdiction in this Act mentioned’

28 that the Act of 1925 in England giving power to hear mortgage actions does not apply to the Admiralty Court in Jamaica as there has been no similar legislative enactment to that effect.

29 Counsel relied on...