Primeport Timaru Limited v MV Rangatira
[2017] NZHC 71
•3 February 2017
IN THE HIGH COURT OF NEW ZEALAND IN ADMIRALTY
TIMARU REGISTRY
CIV-2016-476-64 [2017] NZHC 71
Admiralty action in rem BETWEEN
PRIMEPORT TIMARU LIMITED Plaintiff
AND
MV RANGATIRA Defendant
Hearing: 2 February 2017 (by Teleconference) Appearances:
P W David QC and M J Austin
H Q Fletcher and K A van Wijngaarden (on delivery of judgment)
Judgment:
3 February 2017
ORAL JUDGMENT OF NICHOLAS DAVIDSON J (JUDGMENT BY DEFAULT AND ORDERS FOR APPRAISAL AND SALE OF VESSEL MV RANGATIRA)
Background
[1] The MV Rangatira (the vessel) has been lying at berth in the port of Timaru
(PrimePort), since July 2015.
[2] The vessel had been operating between Timaru and Owenga, Chatham Islands, since approximately 2001.
[3] The vessel arrived on 29 July 2015 at PrimePort. This was her last
Chatham Island run and she has not left since.
PRIMEPORT TIMARU LTD v MV RANGATIRA [2017] NZHC 71 [3 February 2016]
[4] On 8 December 2015, PrimePort received a detention notice issued by Maritime New Zealand detaining the vessel at her berth because the necessary Maritime Certification had not been met. The certificate of survey had expired, and no steps taken to maintain the Safe Ship Management/Maritime Operator Safety System Certificate, which had also lapsed.
[5] PrimePort was granted leave of this court to commence proceedings in rem. It claims for unpaid berthage fees. It made application for arrest of the vessel, and for its appraisement and sale.
[6] The vessel was arrested by the Registrar on 17 November 2016. Proceedings were served on the ship on 22 December 2016 and service is proved. Since the vessel’s arrest, it has remained at berth in PrimePort incurring daily berthage fees of
$750 excluding GST. No person or company has sought to pay, nor accepted responsibility for such payment. The vessel has not been maintained and is deteriorating daily.
[7] The vessel owner, South East Shipping Ltd, is in liquidation as a result of an order of this Court made on 1 November 2016. The liquidator purported to disclaim an interest and liability for the vessel and for the berthage obligation, and consented to an action being brought in the Admiralty jurisdiction on the basis no claim be made in the liquidation or against the liquidator.
Other potential parties with an interest
[8] No party has entered an appearance pursuant to HCR 25.14, neither by the owner (through the liquidator) or any other person who claims an interest in the vessel. The liquidator’s legal representative was notified that the in rem proceedings were filed and served, the ship arrested, and the first call of the proceedings. Copies of pleadings were provided to the legal representative but there has been no response. By letter of 25 January 2017 the legal representative for the mortgagee said that he did not oppose, and would not be taking any steps in the proceeding.
Judgment sought
[9] PrimePort seeks judgment by default in rem for the outstanding berthage fees between 14 March 2016, the date of liquidation of South East Shipping Ltd, and
17 November 2016, being the date the vessel was arrested, together with costs and interest. Beyond that date, berthage fees are a cost of arrest recoverable from any sale proceeds paid into court.
[10] PrimePort seeks an order for appraisement and sale of the vessel in terms of the draft order provided to the court. An order for sale is a standard admiralty practice where judgment in default is entered.1
[11] HCR 25.32 provides that:
A plaintiff to an action in rem may apply to the court for judgment by default if -
(a) the defendant to the action fails to enter an appearance within the period specified for appearing; and
(b) not less than 10 working days has passed since the notice of proceeding was served; and
(c) the plaintiff has filed an affidavit proving due service of the notice of proceed, a statement of claim (where one has not already been filed), and an affidavit verifying the facts on which the action is based.
[12] HCR 25.33(1) provides that:
On being satisfied at the hearing that the applicant’s claim in an action in
rem is well founded, the court may –
(a) Give judgment for the claim; and
(b) At the same time, -
(i) order the property against which the action, or, as the case may be, the counterclaim is brought to be appraised and sold and the proceeds to be paid into court; or
(ii) make any other orders it thinks just.
1 Meeson Admiralty Jurisdiction and Practice, 2011 para 4.126.
Discussion
[13] I have read the affidavits of service of these proceedings, the statement of claim, affidavits verifying the facts on which the action is based, and the memorandum of counsel, with whom I have spoken.
[14] More than 10 working days has passed since service on the vessel on
22 December 2016 and no appearance has been entered.
[15] The outstanding port charges go beyond the claim for outstanding berthage fees. Judgment is sought for an amount set out in the statement of claim.
[16] Paul David QC with Ms Madeline Austin, says the vessel has reached the end of its economic life and presents a risk to the Timaru port and the environment. This is clearly made out on the evidence provided in a report to the Chief Executive Officer of PrimePort, Mr Melhopt on 9 June 2016.
[17] PrimePort has had concern about the vessel for some time. The vessel was not being continually monitored and there was no regular pattern of checks, but rather an occasional check by the mortgagee. Historically the owner kept the vessel well maintained but a report provided to PrimePort on 4 May 2016 recorded the vessel had not been well maintained over five or six years because of financial difficulties.
[18] An order for appraisement and sale of the vessel will not diminish the interests of third parties and is more likely to preserve the res.
Judgment and order
[19] A draft order has been put before the court. Once judgment by default is entered, orders may be made for appraisement and sale. Orders are now made as sought (as below), with an additional order reserving leave for the plaintiff, the Registrar, or any other party with an interest to seek further directions from the court.
[20] Orders sought pendente lite (before judgment on the claim) are not required, given judgment by default.
[21] There was a suggestion that there was no need for appraisement before sale by the Registrar, given the condition of the vessel. I consider that an appraisement should be made to assist and protect the Registrar’s position. An undertaking has been given by the plaintiff to meet on demand the fees and expenses of the Registrar in relation to appraisal and sale and that undertaking is inherent in judgment.
[22] It is therefore ordered that:
(1) Judgment by default is entered against the defendant in the sum of
$177,750 together with interest in the sum of $25,091.13 in accordance with the plaintiff’s terms and conditions, and costs in the sum of $12,934.
(2) The MV Rangatira be appraised and sold by the Registrar of this
Court.
(3)The Registrar choose one or more experienced persons to appraise the vessel and certify its value in writing.
(4)The Registrar sell the vessel by conditions of sale to achieve the highest price which can be obtained for it but for no less than the certified value without a further order of the court.
(5)The Registrar establish sale conditions for the sale of the vessel in consultation with the representatives of the plaintiff. The sale conditions shall include a condition that any purchaser shall remove the vessel from the berth where it currently lies at the Port of Timaru at the purchaser’s cost immediately upon completion of the purchase of the vessel.
(6) The proceeds of any sale of the vessel shall be paid into court by the
Registrar.
(7)For the avoidance of doubt the plaintiff shall be entitled to maintain any possessory lien claim which it has against the MV Rangatira vessel in respect of its berthage fees against any proceeds of sale of the vessel.
(8)Leave is reserved for the plaintiff, the Registrar, and any other party with an interest in the vessel MV Rangatira, or the proceeds of sale, to seek further directions from the court.
………………………………………….
Nicholas Davidson J
Solicitors:
Oceanlaw New Zealand, Nelson cc: Paul David QC, Auckland
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