Jebmed SRL v Capitalease S.P.A. Owners of M/v Trading Fabrizia; Elburg Ship Management v Enterprise Shipping Agency et Al

• Jurisdiction: Jamaica
• Judge: Phillips JA,P Williams JA,Straw JA
• Judgment Date: 20 December 2017
• Neutral Citation: JM 2017 CA 41
• Docket Number: SUPREME COURT CIVIL APPEAL NO 86/2017
• Court: Court of Appeal (Jamaica)
• Date: 20 December 2017

Between

Jebmed S R L

Appellant

and

Capitalease S P A Owners of M/V Trading Fabrizia

Respondent

and

X/O Shipping A/S

Intervenor

and

Ligabue S P A

Interested Party

Consolidated with

Between

Elburg Ship Management

Claimant

and

Enterprise Shipping Agency

First Defendant

and

Capitalease S P A

Second Defendant

and

Motor Ship Trading Fabrizia

Third Defendant

[2017] JMCA Civ 45

Before:

THE HON Miss Justice Phillips JA

THE HON Miss Justice P Williams JA

THE HON Miss Justice Straw JA (AG)

SUPREME COURT CIVIL APPEAL NO 86/2017

IN THE COURT OF APPEAL

Civil Appeal - Procedural appeal — Principle of liberty to apply — Security for costs shipping law — Ship mortgage — Possession of ship — Mortgagee's right to possession.

Written submissions filed by Chen Green & Co for the appellant

Written submissions filed by Myers, Fletcher & Gordon for the respondent

PROCEDURAL APPEAL

(Considered on paper pursuant to rule 2(3) of the Court of Appeal Rules 2002)

Phillips JA

1 I have read in draft the reasons for judgment of my sister Straw JA (Ag). I agree with her reasoning and conclusion and have nothing useful to add.

P Williams JA

2 I too have read the draft reasons for judgment of my sister Straw JA (Ag) and agree with her reasoning and conclusion. I have nothing to add.

Straw JA (AG)

3 This is an appeal from the orders of Batts J that were made on 15 August 2017. On 10 November 2017 the court, in the presence of counsel, handed down its decision in this appeal from the orders of Batts J in the following terms:

• “1. Appeal dismissed.

• 2. The orders of the Honourable Mr Justice Batts dated 15 August 2017 are affirmed.

• 3. Costs of the procedural appeal to the respondent, Capitalease SPA Owners of M/V Trading Fabriza and to the claimant, Elburg Ship Management to be taxed, if not agreed.”

Our reasons for that decision are set out below.

4 The relevant background has been set out succinctly in the judgment of Morrison P in Jebmed SRL v Capitalease SPA owners of M/V Trading Fabrizia et alconsolidated withElburg Ship Management v Enterprise Shipping Agency et al [2017] JMCA App 29, given in consideration of an application by the appellant for a stay of execution of the orders of Edwards J. The relevant paragraphs, [2] to [6], which includes the orders of Edwards J, are set out below:

• “[2] The subject matter of this litigation is ‘The Trading Fabrizia’ (the ship), a ship which flies the flag of Malta. The ship is currently under arrest in Kingston Harbour, pursuant to an order for its arrest made by Batts J on 30 October 2016. The order for arrest was made at the instance of the applicant, which is the mortgagee of the ship. The respondent is the owner of the ship. The other parties named in the title of the consolidated actions include X/O Shipping A/S (the intervenor), which claims an interest in respect of fuel supplied to the ship, Ligabue S.P.A. (the interested party) and Elburg Ship Management (Elburg), agents of the former crew members of the ship, whose claim is for wages allegedly due to the crew.

• [3] Starting with its arrest, the dispute between the applicant and the respondent concerning the fate of the ship has generated considerable activity in the Admiralty Division of the Supreme Court. Over a period of a mere seven months, it has already spawned four written judgments (two each by Batts J and Edwards J), and an order (by Laing J) in respect of which no written reasons were given. Nevertheless, for the purposes of this application, the aspects of the litigation relevant to this application may be briefly summarised as follows.

• [4] In its capacity as mortgagee of the ship, the applicant sought and obtained the order for the arrest of the ship in respect of a debt of US$699,046.38 allegedly due to it from the respondent. On 23 December 2016, Batts J declined to make the order for sale of the ship which was then sought by the applicant. However, he granted the respondent's application for the release of the ship, upon conditions which included the provision by the respondent of a satisfactory bond, guarantee or undertaking in respect of the debt claimed by the applicant.

• [5] By an order made 18 April 2017, Laing J refused (i) the Admiralty Bailiff's application for sale of the ship; and (ii) the applicant's application for an order for interim possession of the ship.

• [6] By an order made on 28 June 2017, Edwards J granted the applicant's renewed application for a judicial order for appraisement and sale of the ship. In assessing whether the order should be granted on this occasion, Edwards J considered the circumstances in which the previous applications for orders for sale by the applicant and the Admiralty Bailiff were refused by Batts J and Laing J respectively. Her conclusion was that, given the significant time which had elapsed since the arrest of the ship, and the fact that all ships arrested are subject to depreciation from ordinary wear and tear and natural elements, it was now an appropriate time for the ship to be sold. Edwards J then went on to give detailed reasons for her decision, before making the following order:

  • ‘1) The application for sale is granted on condition.

  • 2) Provided that the defendant fails to provide alternate security in the amount of USD$450,000.00, USD$139,000.00, USD$778, 497.79 and USD$537,836.00 in the form of bonds, guarantees, payments into court or undertakings satisfactory to Jebmed S.R.L., Ligabue S.P.A., Elburg Ship Management and XO Shipping A/S, respectively, the Admiralty Bailiff is empowered to proceed to appraisement and sale of the M/V ‘Trading Fabrizia’ within 30 days of this order.

  • 3) Should the defendant comply with the conditions at (2) before the expiration of 30 days following upon the date of this order, the vessel shall be released from arrest.

  • 4) Liberty to apply.

  • 5) Costs to the Claimant Jebmed S.R.L. to be agreed or taxed.’”

5 No appeal was filed against the judgment of Edwards J. She had also considered two other applications subsequent to her judgment in the above-mentioned matter. Firstly, an application filed by the respondent on 19 May 2017 to strike out the appellant's claim and for the release of the vessel from arrest. This was argued on the basis that the claim was res judicata as the appellant had brought a claim in another jurisdiction (Malta) and had obtained a favourable result. The second was filed by the appellant on 31 May 2017, requesting permission to amend its claim to include a claim for possession of the ship. Edwards J refused the application of the respondents and granted permission to the appellant to amend the claim in a separate judgment dated 19 July 2017.

6 On 17 July 2017, the appellant in this matter, Jebmed SRL, filed a notice of application for court orders for possession of the said ship. This application was heard by Batts J on 7, 8, 9, and 15 August 2017. The orders which were sought are set out below:

• “1) A declaration that the Claimant is entitled to Possession as Mortgagee under the Mortgage dated 6 ^th day of May 2016;

• 2) The Claimant be given possession of M/V ‘Trading Fabrizia’ (‘the Ship’) with costs related to compliance with this order being payable as a priority payment after Bailiff's fees, costs and expenses upon release of the ship;

• 3) Abridgement of time and for the court to hear the matter notwithstanding that it has been short served under the Rules (Rule 26.1(2)(c));

• 4) Permission for the mortgagee, to itself bail the vessel by posting the appropriate security as ordered by her Ladyship Mrs Carole Edwards [sic] or to take such other steps as are appropriate to bring about the release of the vessel and to bring the costs of so doing to account as monies due and payable under the mortgage by the mortgagor/defendant (Rule 70.11(4) (b) and (c) (i));

• 5) An injunction to restrain the defendant, its servants and/or agents from interfering with the Claimant's taking possession under the mortgage of the Ship, M/V ‘Trading Fabrizia’. That such order be endorsed with a penal notice pursuant to Rule 53.3(b) of the Civil Procedure Rules (2002) against the Company and/or its agents and any third party who should disobey the order (Rule 17.1(a) and 17.2(1)).”

7 In the submissions before Batts J, counsel for the appellant argued that the application was essentially to vary the orders of Edwards J under the provision of ‘liberty to apply’. Batts J refused the application by the appellant to vary the order of Edwards J made on 28 June 2017 and gave leave to appeal. The grounds of appeal are set out below:

• “a) The Court proceeded as though it was determining the matter of possession as a preliminary issue and heard arguments and reviewed facts and authorities in furtherance of the process.

• b) The Court has ignored or has not had due regard to the factual and legal position that the appellant had actual possession of the vessel pursuant to the terms of the mortgage and deed of covenant upon the arrest of the vessel by the appellant mortgagee and the Court was being asked to permit the taking of physical possession without a breach of the peace.

• c) The Learned Judge erred in law when he found that the Court does not have the power to vary the interlocutory order for sake of the Court under the liberty to apply order of his sister Justice C. Edwards.

• d) The Court failed to take into consideration that the purpose of the order made by Edwards J on 28 ^th June 2017, was to clear the harbour of the ship and the application was an effort to further this purpose enabling the appellant to itself bail the vessel after it had possession. The variation sought was in furtherance of this purpose.

• e) The Court misunderstood the variation which was to vary the order to enable the achievement of its purpose by permitting the appellant to do that which the respondent would not or could not do.

• f) The Learned Judge...