| The "Damavand" [1993] 2 SLR 717; [1993] SGCA 44 |
| CA 134/1992 | |
| 31 May 1993 | |
| Court of Appeal | |
| L P Thean J, Rajendran S J, Warren Khoo L H J | |
| M Namazie and Tan Teng Muan (Mallal & Namazie) for the appellants, Steven Chong and Douglas Choo (Drew & Napier) for the respondents |
Judgment
[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.] Judgment reserved. LP Thean J (delivering the judgment of the court): 1 This is an appeal against the decision of Karthigesu J in which he dismissed an appeal from the decision of the senior assistant registrar dismissing the application by the appellants to set aside the writ and the warrant of arrest of their ship, the Damavand. The appeal raises novel points of law. 2 The material facts which gave rise to the appeal are these. The appellants are the National Iranian Tanker Company, the owners of the ship, the Damavand. They also owned other ships, including the Minab 4, Alamoot, Khark 2, Shir Kooh, Taftan and Bisoton. The respondents, International Paint Ltd, on 26 January 1989, entered into a contract with the appellants for the supply of marine paint products to the latter’s fleet. The goods and materials were supplied or sold both before and after the conclusion of the contract, namely, during the period from 1988 to 1989, and were supplied to the Alamoot, Khark 2, Shir Kooh, Taftan and Bisoton at various ports, including Singapore. The appellants failed to pay the respondents for the goods and materials supplied. Accordingly, on 24 October 1989, the respondents commenced an admiralty action in rem No 487 of 1989 against the Minab 4 (‘the Minab 4 action’) and the claim as endorsed on the writ was ‘for goods and materials supplied to the ships or vessels Alamoot, Bisoton, Khark 2, Shir Kooh and Taftan all of the port of Bandar Abbas at various ports including the port of Singapore for the period from 1988 to 1989 at the request of the defendants, their servants or agents’. The Minab 4 was arrested and the writ was served on her on the same day. As we have described, the writ of summons was generally endorsed and the particulars of the goods and materials supplied and of the amounts claimed in respect of the supplies to each of the vessels named were not stated therein. The particulars were also not stated in the affidavit leading to the issue of the warrant of arrest of the Minab 4. 3 On 25 October 1989, the respondents amended the writ in the Minab 4 action by striking out the reference to the Bisoton in the endorsement pursuant to O 20 r 1 of the Rules of Supreme Court, and immediately thereafter on the same day commenced a separate admiralty action in rem against the ship, Damavand, (‘the Damavand action’) and the claim endorsed on the writ was ‘for goods and materials supplied to the ship or vessel, Bisoton, of the port of Bandar Abbas at a port in Portugal in or about the month of April 1989 to June 1989 at the request of the defendants, their servants or agents’. On the same day, the respondents arrested the Damavand which was also in port and the writ was served on her. Similarly, in the Damavand action no particulars of the goods and materials supplied to Bisoton and of the amounts claimed were stated in the endorsement on the writ or in the affidavit leading to the issue of the warrant of arrest. On 1 November 1989, the Damavand was released after the appellants had made payment of £353,737.29 which was the sum stated in the respondents’ statement of account of 10 July 1989. As it transpired, the sum paid was sufficient to discharge all the moneys owed to the respondents in respect of supplies to the Bisoton. Accordingly, the respondents did not proceed to deliver a statement of claim in the Damavand action. But in the Minab 4 action the statement of claim was delivered on 1 December 1989 and was restricted to the claims for goods and materials supplied to the Alamoot, Khark 2, Shir Kooh and Taftan of which particulars were given. 4 Prior to that, on 14 November 1989, the appellants took out an application to set aside the writ and the warrant of arrest in the Damavand action on the grounds that the court lacked jurisdiction and that the action and/or the arrest was frivolous and vexatious and was an abuse of the process of the court. The application was dismissed by the senior assistant registrar and the appellants appealed. The appeal was heard before Karthigesu J. The learned judge in a reserved judgment, reported in 5 Before us, as before the learned judge, two main arguments have been raised: the first pertaining to want of jurisdiction in the action in rem against the Damavand and the second to non-disclosure of material facts in the affidavit leading to the issue of the warrant of arrest of the Damavand. It was argued on behalf of the appellants that the admiralty jurisdiction of the court had been invoked when the Minab 4 action was instituted on 24 October 1989 and the writ of summons at the material time included, among others, a claim for goods and materials supplied to the Bisoton (‘the Bisoton claim’). Thenceforth, it was no longer possible to invoke the admiralty jurisdiction again by an action in rem against the Damavand making the same claim, ie the Bisoton claim, notwithstanding that that claim had been deleted in the Minab 4 action before the Damavand action was commenced. The learned judge rejected this argument and held that a plaintiff could amend his indorsement of claim by removing therefrom a part of his claim, so long as the part was severable and could survive as a separate cause of action. He therefore held that there was no want of jurisdiction. He further held that the respondents had not abused the process of the court since they made the amendment in the Minab 4 action before the time limited for an appearance had expired. On the second issue, it was argued on behalf of the appellants that the prior arrest of the Minab 4 and the inclusion of the Bisoton claim in the Minab 4 action, though the latter was subsequently deleted, were material facts and these were not disclosed in the affidavit leading to the issue of the warrant of arrest. The learned judge, however, held that these were not material facts and accordingly the failure to mention these in the affidavit leading to the issue of the warrant of arrest of the Damavand did not constitute non-disclosure of a material fact. 6 We consider first the argument on the want of jurisdiction which indirectly turns on the construction of s 4(4) of the High Court (Admiralty Jurisdiction) Act (Cap 123). The provision of this subsection is as follows: 4(4) In the case of any such claim as is mentioned in section 3(1)(d) to (q), being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of the action arose, the owner or charterer of, or in possession or in control of, the ship, the admiralty jurisdiction of the Court may (whether the claim gives rise to a maritime lien on the ship or not) be invoked by an action in rem against — (a) that ship, if at the time when the action is brought it is beneficially owned as respects all the shares therein by that person; or (b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid. 7 The construction of this provision has been the subject of litigation in a number of cases and it is established law that the admiralty jurisdiction in rem may be invoked against either the offending ship, ie the ship in connection with which the claim arose, or against any other ship in the same ownership, but not against both. This is commonly called the ‘single ship arrest rule’. This rule was laid down in ‘The Banco’; Monte Ulia (Owners) v Banco and Ors (Owners), an English Court of Appeal decision on s 3(4) of the Administration of Justice Act 1956 which is the English equivalent of s 4(4) of our Act. In that case, the plaintiffs’ vessel, the Monte Ulia, collided with a jetty in the Thames whilst taking emergency action to avoid the defendants’ vessel, the Banco, owing to alleged negligent navigation of the latter. The collision caused damage to the plaintiffs’ vessel and to many other parties who then claimed against the plaintiffs. The plaintiffs brought an admiralty action in rem against the defendants and the writ was served on the Banco and six sister ships and they were arrested. The defendants applied to set aside the service of the writ on the six sister ships and to discharge the warrant of arrest of those ships. Lane J allowed the application and held that s 3(4) of the Administration of Justice Act gave jurisdiction only to arrest either the ship concerned with the claim, ie the Banco, or any other ship in the same ownership, and not both. Her decision was affirmed on appeal. Lord Denning MR in his judgment said, at p 152: The important word in that subsection is the word ‘or.’ It is used to express an alternative as in the phrase ‘one or the other.’ It means that the admiralty jurisdiction in rem may be invoked either against the offending ship or against any other ship in the same ownership, but not against both. This is the natural meaning of the word ‘or’ in this context. 8 Later he said, at p 153: I would add that the word ‘ship’ in the phrase ‘any other ship,’ means ‘ship’ and not ‘ships.’ Although the Interpretation Act 1889, says that words in the singular include the plural, that does not apply when the contrary intention appears. The contrary intention does not appear here. The jurisdiction may be invoked against either the offending ship or any other ship in the same ownership, but not more than one. 9 The decision in The Banco was followed by this court in ‘Brunei 602’, Owners of Cargo Aboard MV v MV Hai Hin 28, Owners of, & Anor. In that case, the cargo consisting of 390 pieces of coated pipes was loaded on board a dumb barge Brunei 602 towed by the tug Hai Hin 28 for carriage from Singapore to Indonesia. On the way the cargo fell into the sea off the coast of Kalimantan and was totally lost. The plaintiffs took out a writ against the first defendant as the owner of the tug Hai Hin 28 and the second defendant as owner of the barge Brunei 602. The defendants entered a conditional appearance and applied to set aside the writ and the arrest. The application was allowed by the deputy registrar and on appeal the decision of the deputy registrar was affirmed. The plaintiffs further appealed, and the appeal was dismissed by the Court of Appeal. AP Rajah J delivering the judgment of the court said, at pp 229 to 230: In our judgment it is now settled law that when a plaintiff brings an action in rem against more than one ship owned by a defendant, the jurisdiction of the court is invoked when the writ is served on one of the named ships and the warrant of arrest is executed. That having been done, the plaintiff cannot go against the other named sister ships and should strike them out of the writ. If he does not do so, the court, on the application of the defendant, will strike the other named sister ships out of the writ and set aside service of the writ and warrant of arrest on the other named sister ships. 10 It was urged upon us that the effect of the ‘single ship arrest rule’ is that the admiralty jurisdiction can only be invoked by an action in rem once and that this jurisdiction is invoked at the point of time when the writ is served on the ship. Hence, in this case when the writ in the Minab 4 action was served on the Minab4, the respondent had invoked the admiralty action of the court in rem in respect of all the claims contained in the endorsement on the writ including the Bisoton claim. That being the position, the respondents had exhausted their remedy in rem in respect of those claims and could not then amend the writ by deleting the Bisoton claim and immediately thereafter seek to invoke the admiralty jurisdiction again by commencing an action in rem against the Damavand pursuing the Bisoton claim. The appellants relied on ‘The Berny’. In that case, the cargo owners issued first a writ against 18 sister ships of the Berny and then a writ against the Berny in respect of a claim for short delivery of sugar carried on board the Berny from Dunkirk to Dar-es-Salaam. The writs were not served and were subsequently renewed. Subsequently, service of the renewed writ in the action against the Berny was accepted on behalf of the shipowners who entered a conditional appearance. The shipowners applied to dismiss the Berny action on the grounds that when the action was begun the cargo owners had already invoked the court’s jurisdiction in rem within the meaning of s 3(4) of the Administration of Justice Act 1956 by issuing the writ against the sister ships. They also applied to set aside the renewal of the writ in the Berny action. Brandon J held, inter alia, that the cargo owners could invoke the admiralty jurisdiction by an action in rem against either the Berny or a sister ship, that the jurisdiction was not invoked until the writ was served and that following the existing practice where more than one writ against several ships had been issued they could elect to serve the writ on either the Berny or a sister ship. The learned judge referred to the view expressed by the majority in the Court of Appeal in ‘The Banco’ to the effect that the jurisdiction in rem was only invoked when the writ was served on the vessel and expressed his agreement with that view. He then said, at pp 98–99: It is no doubt desirable that a plaintiff, who has an option to proceed against any one of a number of ships owned by a defendant, should not be compelled to elect irrevocably between them when he issues his writ, but should instead be able to defer such final election until he knows that a suitable ship is about to come, or has come, within the jurisdiction. 11 Later with reference to the matter before him the learned judge said, at p 99: On any view s 3(4) of the Act of 1956 gave the cargo owners the option to invoke the admiralty jurisdiction of the court in rem against either the Berny or any one of her sister ships. That being so, if the right view is that the cargo owners, instead of exercising their option properly by bringing an action against one only of the ships available to be proceeded against, improperly brought actions concurrently against a large number of such ships, I think that the right course for the court to take would be to compel them to elect against which of such ships they wished to continue. If they elected to continue against the Berny, the sister ship writ should be set aside. If they elected to continue against one of the sister ships, the sister ship writ should be amended by striking out the names of all the ships except the one chosen, and the Berny writ should be set aside. I do not, however, consider that it would be right to compel the cargo owners to continue against one of the sister ships rather than against the Berny, simply on the ground that the sister ship writ was issued first and the Berny writ second. 12 These passages of the judgment were relied upon by the appellants in support of the submission that the respondents having elected ‘irrevocably’ to pursue their claims (which included the Bisoton claim) against the Minab 4 had exhausted the remedy in rem in respect of those claims. They had ‘irrevocably’ elected to proceed against the Minab 4 and therefore could not amend the claims by deleting the Bisoton claim and invoke the admiralty jurisdiction again by taking out a writ in rem with an endorsement of the Bisoton claim against a sister ship, such as the Damavand. We are unable to accept this argument. These passages of the judgment of Brandon J must be understood in their proper context. The learned judge was referring to the situation where a claimant had an option to proceed by an action in rem either against the offending ship or against a sister ship in respect of one and the same claim. In such a situation, once the claimant had served the writ on the offending ship or the sister ship, as the case may be, he had elected ‘irrevocably’ to invoke the jurisdiction in rem against that ship and he cannot concurrenlty pursue the same claim by another action in rem against the sister ship. Brandon J did not say that where a writ with an endorsement of several claims or causes of action was served on the ship in question, the plaintiff has thereby irrevocably elected to pursue all those claims or causes of action against that ship and is precluded subsequently from amending the endorsement by deleting one or more of the claims and thereafter pursuing such claims by a fresh action in rem against a sister ship. 13 The situation in this case is quite different from that prevailing in ‘The Berny’. Here the respondents had multiple claims or causes of action against the appellants and took out a writ in rem with an endorsement of all these claims. On the day immediately following the date of service of the writ on the Minab 4, the Bisoton claim was deleted from the writ, and thenceforth the Minab 4 action ceased to be an action in rem for that claim. At that point of time, there was nothing to prevent the respondents from invoking the admiralty jurisdiction by an action in rem against a sister ship for the Bisoton claim. That they did. Such an action does not violate or infringe the ‘single ship arrest rule’. There was at all material times only one ship against which an action in rem was invoked for the claim or claims in question. ‘The Berny’ is not an authority to the effect that the respondents could not amend the writ in the Minab 4 action by deleting the Bisoton claim and immediately thereafter institute the Damavand action for the Bisoton claim. Karthigesu J in his judgment said, at p 1064: I see no reason, in principle, why a plaintiff should not amend his indorsement of claim by removing therefrom a part of his claim provided it is severable and can survive as a separate cause of action from the remainder of the claim even after a writ in rem has been served and the ship arrested, provided always that it is done before the time limited for an appearance to be entered has expired, to enable him to issue another writ in rem against another sister ship in respect of that cause of action. No authority was cited as to why this could not be done. A plaintiff may always amend the writ once at any time, before the pleadings in the action begun by writ are deemed closed, without the leave of the court (see O 20 r 1 of the RSC). In the Minab 4 proceedings, International Paint amended the indorsement by removing the cause of action against the Bisoton one day after service and thus well before the time limited for an appearance to be entered had expired, thus enabling them to commence another in rem action against the Damavand in respect of the claim arising from the cause of action against the Bisoton. The position as I see it is that, by acting timeously, Internationl Paint have effectively one action in rem against the Minab 4 in respect of their causes of action against the Alamoot, Khark 2, Shir Kooh and Taftan grouped together as one claim and were at liberty to commence another action in rem against the Damavand, which they did, in respect of their claim against the Bisoton which was entirely a separate cause or causes of action from their claim against the Minab 4. 14 We respectfully agree with the learned judge on this passage of his judgment except the limitation he placed in his proviso, namely, that the amendment must be made prior to the expiry of the time limited for an appearance to be entered. For reasons, which we shall give in a moment, we do not think that such a limitation is warranted. 15 Before we move to the next point, it is necessary to dispose of a submission made on behalf of the respondents based on the decision of this court in ‘The Permina Samudra XIV’; Martropico Compania Naviera SA v Owners of Permina Samudra XIV; that decision was also considered by Karthigesu J to be apposite in this case. In ‘The Permina Samudra XIV’, the plaintiffs had a claim against charterers of the ship, the Ibnu, for unpaid charter hire in the sum of US$7,230,711.48. On 24 July 1976, a sister ship of the Ibnu, the Permina 108 was arrested in respect of the claim. On the same day, the plaintiffs also issued a writ in rem and executed a warrant of arrest against another sister ship, the Permina Samudra XIV, this arrest taking place some 15 minutes after the arrest of the Permina 108. Both the writs contained identical endorsements of claim which were as follows: ‘The plaintiffs’ claim against the defendants is for non-payment of charter hire due under a charterparty dated the 1st day of September 1970 in respect of the vessel Ibnu’. The defendants applied to set aside the writ in rem and the warrant of arrest in the latter case. In the meantime, the appellants filed their statements of claim, one in respect of the action in rem against the Permina 108 for instalment payments amounting to US$3,418,521.41 and the other in respect of the action in rem against the Permina Samudra XIV for different instalment payments amounting to US$3,812,190.07. The statements of claim listed the separate instalments and the dates when they fell due. There were four instalments named in each writ, making a total of eight unpaid instalments. The High Court allowed the motion and set aside writ and the warrant of arrest. On appeal, the Court of Appeal reversed the decision and accepted the plaintiffs’ contention that there was no distinction between ‘claim’ and ‘cause of action’ and held that the arrests were in respect of two claims, each of which was founded on a different cause of action as appeared in the two statements of claim. Wee Chong Jin CJ delivering the judgment of the court said, at p 49: … He [Mr Stone for the defendants] submits that in s 4(4) there is a distinction between the expression ‘claim’ and the expression ‘cause of action’. Mr Thomas [for the plaintiffs] contends that these two expressions must have the same meaning and that the word ‘maritime’ is not found in the Act. He contends that the arrests of the ‘Permina 108’ and the ‘Permina Samudra XIV’ were in respect of two claims, each of which arises out of the list in s 3(1) and each of which is founded on a different cause of action as appears in the two statements of claim. He contends that if Mr Stone is correct it would lead to injustice. On the facts of the present case it is conceded that the appellants could have issued separate writs in rem each time an instalment was not paid when due and in respect of each action a ship could be arrested. But where the appellants, as now, did not institute proceedings on each failure to pay an instalment and thus gives the respondents an indulgence, Mr Stone says that the appellants can institute only one action in rem and thus can arrest only one ship because there is only one claim, even though they have more than one cause of action against the respondents. 16 The learned Chief Justice then went to distinguish ‘The Banco’ thus: In our opinion, Monte Ulia (Owners) v Banco and Ors (Owners); ‘The Banco’, supra, is distingishable. In that case it was decided that where there is a claim based on a single cause of action, the jurisdiction in rem cannot be invoked by a single writ addressed to and served upon more than one vessel whereas in the present case the facts are that two separate writs have been issued based on separate and distinct causes of action and each writ names only one ship and has been served on only one ship, the ship named in the writ. 17 On the basis of that decision, it was contended on behalf of the respondents that they had no less than 35 causes of action since there were 35 orders for the respondents’ goods and materials from the appellants, and, in principle, they could have issued 35 writs against 35 ships belonging to the appellants. Alternatively, they could have grouped the causes of action and arrested a smaller number of ships. Therefore it was argued that at the time the writ was served on the Minab 4, the respondents had not committed themselves to deciding which of the 35 causes of action were meant to be included in that writ. It was still open to the respondents to issue a second writ for claims in respect of the goods supplied to the Bisoton, which claim could cover, for example, all but one of the Bisoton invoices. If the respondents had issued two writs both in respect of goods and materials supplied to the Bisoton, they would have been entitled to arrest both the Minab 4 and the Damavand. It therefore follows that there can be no question of want of jurisdiction when each writ was founded on different causes of action. On this line of argument we have one general observation. It is technically correct that where a plaintiff has multiple causes of action he can take out multiple writs in rem against multiple ships of the defendant. But such actions if taken may well amount to an abuse of court process and would probably not be allowed. More specifically, we find that there are two difficulties in the way of this contention. First, the respondents had admitted in the affidavit sworn to by their solicitor on 1 March 1990 that the writ of summons and warrant of arrest issued in the Minab4 action were in respect of the claims for ‘the supply of various paint products to the defendants’ ships or vessels Alamoot, Bisoton, Khark 2, Shir Kooh and Taftan at various ports in Portugal, United Arab Emirates, Holland and Singapore respectively’, which claims were supported by copies of a full set of invoices annexed to the affidavit. There was therefore an admission that, notwithstanding the general endorsement on the writ, the respondents had intended to invoke the admiralty jurisdiction of the court in respect of all the claims or causes of action. Secondly, unlike The Permina Samudra XIV, the writ in the Minab 4 action originally contained a claim for, inter alia, supplies to the Bisoton and was served upon the Minab 4. Even if that did not crystallize the respondents’ claim in respect of all the causes of action arising from supplies to the Bisoton, because they were not particularized, the fact remains that at that time the claim endorsed on the writ must bite upon at least one of the invoices on the Bisoton claim. The writ in the Damavand action was taken out for the supply of various products to the ship or vessel Bisoton and from the affidavit of the solicitor it was for the entire Bisoton claim. Hence, if this writ was served on the Damavand before the amendment to the endorsement of the claim in the Minab 4 action the Damavand action would have fallen foul of the ‘single ship arrest’ rule. In our opinion, The Permina Samudra XIV does not support the case of the espondents. 18 We now turn to an alternative line of argument advanced by counsel for the appellants, which is this. It is settled law that an action in rem operates only against the res, and if the defendant, namely, the owner or party interested in the res, does not enter an appearance, a judgment obtained in such action is limited to the value of the res or the bail which represents the res. Once the defendant enters an appearance, he submits to the jurisdiction of the court and from then onwards the action continues as an action in rem and in personam and judgment may be entered and enforced against the defendant to the full extent of the amount awarded to the plaintiff and is not limited to the value of the res or the bail which represents the res: see The Dictator and The Gemma. Therefore, on these authorities, so counsel submitted, the respondents by deleting the Bisoton claim from the writ in the Minab 4 action and immediately thereafter instituting the Damavand action for the Bisoton claim contravened this rule. Karthigesu J appeared to accept this argument in principle but held that in this case the rule had not been breached since the right to abandon the vessel had not yet accrued. Thus he held that it was crucial that any amendment to the claim must be effected before the time limited for entry of appearance expired since it was then that the right accrued. The learned judge in his judgment said, at p 1066: … the amendment to the indorsement of claim in the Minab 4 proceedings was made well before the time limited for appearance had expired. In my view, International Paint were well within their rights, both legally and procedurally, to amend the indorsement of claim in the Minab 4 proceedings by reducing it (in the way they did) or, for that matter, by adding to it … 19 With this passage of the judgment we entirely agree. But the learned judge added the following qualification: … provided, and this is crucial, provided that the amendment is effected before the time limited for an appearance has expired. Once that time has expired and having regard to such authorities as ‘The Dictator’ 20 With respect, we are unable to accept this qualification. In our respectful view, the authorities referred to do not support it. In ‘The Dictator’, the plaintiffs instituted an action in rem against the ship, the Dictator, her cargo and freight, claiming £5,000 for salvage services rendered. The solicitors for the owners of the ship gave an undertaking to enter an appearance for the defendants and to put in bail in an amount not exceeding £5,000 in consequence of which the ship was not arrested. The action was subsequently tried and a sum of £7,500 was awarded, and the plaintiffs with leave of the court amended the claim by increasing the amount to £8,500. The defendants paid the costs and offered to pay £5,000 for which they had undertaken to put in bail; but that sum the plaintiffs declined to accept. The question which eventually arose was whether execution could be issued against the owners of the salved ship, her cargo and freight for more than £5,000 and costs. It was held by Jeune J that the plaintiffs were entitled in the action to issue a writ of fieri facias to enforce payment of the full amount awarded. The learned judge in the course of his lengthy judgment said, at pp 320–321: In ‘The Parlement Belge’ 21 This decision was approved by the Court of Appeal in ‘The Gemma’. There, the plaintiff whose ship was involved in a collision with the ship, the Gemma, instituted an action in rem against the Gemma. The solicitors for the owners of the Gemma entered an appearance, and bail in an amount equal to the value of the Gemma and her freight was provided. Subsequently, the action was tried and the plaintiff obtained judgment against the defendants for an amount exceeding the amount for which the bail had been given. The defendants paid to the plaintiff the amount equal to that of the bail; the plaintiff then sued out a writ of fieri facias for the unsatisfied balance. It was held that the defendants by appearing had submitted themselves to the jurisdiction of the court and rendered themselves personally liable and therefore payment of the balance could be enforced under a writ of fieri facias. AL Smith LJ said, at pp 291–292: Now, apart from authority, it appears to me that when persons, whose ship has been arrested by the marshal of the admiralty court, think fit to appear and fight out their liability before the court, the form of the proceedings in the admiralty court shew — and it is not disputed that the forms I have referred to are those which have been in use, according to the practice of the court, from olden times — that the persons so appearing, as the defendants have done in the present case, become parties to the action, and thereby become personally liable to pay whatever in the result may be decreed against them; and the action, though originally commenced in rem, becomes a personal action against the defendants upon appearance. 22 These principles as laid down in ‘The Dictator’ and ‘The Gemma’ were followed in ‘The Dupleix’ where the facts were substantially identical with those in ‘The Gemma’; see also ‘The August 8’. In all these cases, it was held that in an action in rem where the defendant appears to contest or reduce his liabilities, the judgment when entered would be enforceable against him personally. The case of Castrique v Imrie is of no assistance as the facts and the issues raised were quite different. There is nothing in any of these authorities to suggest that if the defendant does not enter an appearance within the time limited for so doing, the plaintiff ought not to be permitted to add to or subtract from the claim indorsed on the writ. The plaintiff cannot be constrained by such inactivity or inertia on the part of the defendant in exercising whatever rights he may have in relation to the action. If the defendant in an action in rem elects not to enter an appearance and abandon the res to the fate of the action, he is at liberty to do so and in that case he must accept the consequences. AL Smith LJ in ‘The Gemma’ said (at p 292) that there were three reasons for the defendant to an action in rem to enter an appearance: … There are, as it seems to me, three reasons for the appearance: first, to release the ship, so that it may go on trading for the owner; secondly, to contest the plaintiffs’ allegations that the ship had been in default; and, thirdly, in order to prevent its being sold. 23 Whatever may be the reason for the owner appearing or not appearing in an action in rem to defend the res, it is a matter wholly for him to decide and he must accept the consequences that ensue from the decision he has made. In ‘The Burns’ at p149, Fletcher Moulton LJ said: I am, therefore, of opinion that … … … and that the action in rem is an action against the ship itself. It is an action in which the owners may take part, if they think proper, in defence of their property, but whether or not they will do so is a matter for them to decide, and if they do not decide to make themselves parties to the suit in order to defend their property, no personal liability can be established against them in that action. It is perfectly true that the action indirectly affects them. 24 It does not follow, and there is no authority to this effect, that if the owner does not appear the plaintiff is not at liberty to amend his claim either by adding to or subtracting from the claim endorsed on the writ. In our opinion, a plaintiff in an action in rem is at liberty to amend his claim by adding thereto or subtracting therefrom at the time and in the manner as allowed by the rules of the court. Depending on the circumstances, he may amend his claim even after the time limited for entering appearance has expired. However, the exercise of such right is always subject to control by the court. Where the exercise of such right amounts to an abuse of the process of the court, it would not be allowed. For instance, if in an action in rem against a ship involving more than one claim, her owner puts in a bail which is accepted by the plaintiff and as a result the ship is released from arrest, it would be unfair of the plaintiff in such circumstances to amend his claim subsequently by deleting a claim in that action and thereafter initiating another action in rem against a sister ship for the same claim. The plaintiff in accepting the bail has in effect crystallized his claim for the purpose of the remedy in rem. Such a course if taken by the plaintiff would probably amount to an abuse of the process of the court. 25 Finally, the appellants submitted that the warrant of arrest of the Damavand should be set aside on the ground that there was non-disclosure of material facts in the ex parte proceedings leading to the issue of the warrant of the arrest of the Damavand. The material facts complained of were the prior arrest of the Minab 4 and the inclusion of the Bisoton claim initially in the Minab 4 action. KarthigesuJ held that the test as to whether the prior arrest of the Minab 4 was a material fact that required disclosure was whether, had this fact been disclosed to the registrar granting the application for the issue of the warrant of arrest of the Damavand, he would have been inclined to refuse the application. In his opinion, this fact would not have affected the decision and therefore there was no non-disclosure of a material fact. 26 In ‘The Evmar’, Chao Hick Tin JC following a passage of the judgment of Goff LJ in ‘The Tuyuti’ held that omission in the affidavit leading to the warrant of arrest of the vessel to disclose (i) the arbitration clause in the bill of lading, (ii)the defendant’s lack of means to satisfy the arbitration award and (iii) the fact that the parties were negotiating for a letter of undertaking in lieu of arrest, did not amount to non-disclosure of material facts. In ‘The Tuyuti’ Goff LJ held, inter alia, that non-disclosure of an arbitration clause in the affidavit to lead the warrant of arrest did not amount to non-disclosure of a material fact. He said, at pp 63–64: … I should briefly mention one other argument advanced by Mr Teare. This was that, since the affidavit sworn to lead the warrant of arrest did not disclose the fact that there was an arbitration clause in the wool bill of lading, there had not been the full and frank disclosure which is required on ex parte applications of this kind, and on that ground also the arrest should be set aside: see ‘The Vasso’. In my judgment, this argument is without substance, as appears from the judgment in that case. There an arrest was set aside because the affidavit to lead the warrant failed to disclose that at the date of the affidavit the parties had entered into an ad hoc arbitration agreement for the resolution of the very dispute which was the subject matter of the action in rem and that the parties were actively pursuing arbitration proceedings under that agreement. In such circumstances the court would, had it been aware of those facts, have declined to exercise its jurisdiction to issue a warrant, unless facts were also deposed to (which they were not) bringing the case within the principle in ‘The Rena K’. The present case is, however, not such a case. It does not follow that because there is an arbitration agreement, eg as here, an arbitration clause in a bill of lading, that agreement will be invoked for the purpose of deciding a dispute which has arisen under it, and so, as is pointed out in the judgment in ‘The Vasso’ (at pp 241–242), the mere fact that there is an arbitration agreement does not of itself preclude a party of the agreement from bringing an action or, in the case of an action in rem, from procuring the arrest of a ship. I can discern no lack of disclosure in the affidavit to lead the warrant in the present case. 27 Two other illustrative cases were cited by counsel for the appellants. In ‘The Kherson’ the plaintiffs had arrested the defendants’ vessel, the Kherson, and the defendants applied for the warrant of arrest to be set aside. One of the grounds upon which the application was made, was that there had not been full disclosure of material facts to the court during the ex parte application for the arrest. The plaintiffs had failed to exhibit, in their affidavit leading to the arrest, a copy of telex from the defendants’ solicitors setting out the reasons why it would be wrong to arrest the vessel. In particular, the affidavit did not convey to the reader that proceedings against the defendants had been commenced in the Netherlands. Sheen J held that the inevitable consequence of such a disclosure would have been that proceedings in England would have been stayed or jurisdiction declined, had the master been fully apprised of the defendants’ contentions. Applying the principle emphasized by Goff LJ in ‘The Vasso’ at p 243, Sheen J held that the court had issued the warrant of arrest on the basis of an affidavit which had failed to disclose material facts, and accordingly, he ordered the release of the vessel. 28 In ‘The Nordglimt’ the defendants asked, inter alia, that the warrant of arrest of the ship Nordglimt be set aside on the ground that the plaintiffs had failed to make full and frank disclosure of all the material facts in their application for the issue of the warrant. Hobhouse J held that what the defendants had characterized as non-disclosure was in fact mis-statement or inaccurate statement of fact which the plaintiffs ought to have known. The learned judge said, at pp 473–474: The ground which the defendants chose to characterize as non-disclosure was probably more accurately described as one of mis-statement. The affidavit to lead the warrant for arrest made inaccurate statements of fact which ought to have been known to be inaccurate. If their inaccuracy had been disclosed to the court then, unless additional facts had also been disclosed, the warrant would have been refused. However it is accepted by both parties before me that if the true facts had been relied upon, that is to say if the genuine bill of lading had been referred to and the actual quantity of goods shipped had been stated, then there would be nothing wrong with the affidavit and (subject to the other grounds) there would have been no reason for the court to refuse to issue the warrant of arrest or for the defendants or any other interested party to object to it … This said, I do not consider that the inaccuracy of the affidavit sworn to lead the warrant of arrest justifies setting aside that warrant. As was pointed out by the Court of Appeal in ‘The Vasso’ (formerly Andria) [1984] 1 Lloyd’s Rep 235, the application for a warrant of arrest is an ex parte application and the ordinary principles of disclosure to the court apply. However as was stated by the Court of Appeal in Brink’s-Mat Ltd v Elcombe (well reported in The Independent 25 June 1987), it does not automatically follow that the failure to place the proper facts accurately before the court will invariably lead to the setting aside of the order so obtained. Here the inaccuracy was not deliberate and did not affect the merits. The inaccurate facts did not enable the plaintiffs to obtain any relief which they would not have obtained if they had stated the correct facts. The inaccuracy was central to the description of the plaintiffs’ cause of action but was immaterial in that with the substitution of the correct date and the correct quantity of cargo loaded the position would have been precisely the same as that stated. The plaintiffs have not obtained any advantage by misleading the court. It follows therefore that I will not set aside the warrant of arrest on this ground and that any consequences are adequately dealt with by an appropriate order for costs. 29 Finally, the appellants relied on ‘The Stephan J’ in support of their argument. In ‘The Stephan J’, a writ in rem was issued against ‘the ships Stephan J and Herm J. Herm J was arrested but shortly after she was released because the plaintiffs’ solicitors discovered that Herm J was not owned by the owners of Stephan J. Subsequently, the solicitors were informed of the arrival of Stephan J. The solicitors attended at the Admiralty Registry applying for the issue of a warrant of arrest of Stephan J. In their application, the solicitors for the claimants did not disclose the fact of the prior arrest of Herm J. However, that fact was recollected by the Admiralty Marshall and the application was refused as it was deemed to contravene s 21(8) of the Supreme Court Act 1981. Section 21(8) provided that once a ship has been arrested in an action in rem to enforce a claim, no other ship may be arrested in that or any other action to enforce that claim. In other words, the section gives statutory effect to ‘the single ship arrest rule’. The plaintiffs appealed against the decision of the Admiralty Marshall. The appeal came before Sheen J who held that the plaintiffs were entitled to arrest the Stephan J, as on the true construction of s 21(8), the first arrest must concern a ship against which an action in rem could be brought. In that case, the Herm J was not such a vessel since at the time the action was brought, it was not beneficially owned by the relevant person in respect of all the shares in it. Although it was not necessary to his decision, the learned judge also stated, at p 346: ... a solicitor who swears an affidavit in support of an ex parte application has a duty to make full disclosure of all relevant facts. In view of sub-s 8 of s 21 of the Supreme Court Act 1981, it was relevant to the application for the arrest of Stephan J that Herm J had been arrested in the same action. (Emphasis added.) 30 It seems to us that the test of materiality is whether the fact is relevant to the making of the decision whether or not to issue the warrant of arrest, that is, a fact which should properly be taken into consideration when weighing all the circumstances of the case, though it need not have the effect of leading to a different decision being made. In this case, we agree entirely with Karthigesu J that the fact that Minab 4 had been arrested and the fact that at that time the claim in the Minab4 action included the Bisoton claim which was subsequently deleted, were not material and would not have affected the decision whether or not to issue the warrant of arrest. 31 In the result, this appeal is dismissed with costs. The deposit paid into court as security for costs is to be paid to the respondents to account for costs. Appeal dismissed Reported by Joan Francis